Was Cash for Clunkers a Clunker?

Cash for Clunkers: An Evaluation How did the program impact the economy? Overview $2.85 678,000 $4,200 BILLION CARS AVERAGE SPENT TRADED IN REBATE Vehicles traded in Vehicles purchased 109,000 404,000 Passenger cars 451,000 232,000 Cat. 1 trucks 117,000 47,000 Cat. 2 trucks 8,000 2,000 Cat. 3 trucks Share of vehicles purchased, by manufacturer 19.4% 17.6 14.4 13.0 8.7 7.2 6.6 4.3 2.5 2.4 2.0 0.6 0.5 0.4 0.2 0.1 0.1 GM Ford H) KIA smart Voucher amounts by state TOTAL VOUCHER AMOUNT PER-CAPITA VOUCHER AMOUNT Highest Highest: CALIFORNIA: $327,000,000 NEW HAMPSHIRE: $17.40 Lowest Lowest D.C.: $67,500 D.C.: $0.11 Vehicle sales CARS PROGRAM ACTIVE During the CARS program, vehicle sales increased 14% in July 2009 and another 28% in August. But sales reverted to pre-program levels after it ended. 1,500 RECESSION 1,250 1,000 750 500 250 2007 2008 2009 2010 2011 2012 2013 Overall, the CARS program provided a boost of 380,000 vehicle sales. But most of these sales would have otherwise occurred during subsequent months. Cost per job created The cost per job created under CARS was much higher than alternative fiscal stimulus policies. $1.4 $222 $222 $200 $133 $95 $80 CARS program ' MILLION Full/partial expensing of investing costs THOUSAND Reducing employee payroll tax THOUSAND One-time social security payment THOUSAND Reducing employer payroll tax THOUSAND Increasing aid to unemployed THOUSAND Reducing payroll tax for firms that add jobs THOUSAND B Economic Studies at BROOKINGS TOYOTA O Vehicles sold (thousands) FORD HONDA O NVSSIN HYUNDAI CHRYSLER A SUBARU VOLKSWAGEN EIO IMnzns MITSUBISHI INIW