Jeremy Anwyl, CEO of Edmunds.com
GLENN: 888 727 BECK, 888 727 BECK. The CEO of Edmunds.com which has been named the best car research site by Forbes, selected by consumers as the most useful website according to every J.D. Power and Associates auto shopper. Jeremy Anwyl is on the phone. Edmunds is not Jeremy, let me ask you this: You are not a partisan group. You have nothing to do with politics or anything else. You are just a car site.
ANWYL: Yeah, fundamentally a consumer car site, right.
GLENN: And you did research on the Cash For Clunkers thing.
ANWYL: Yeah. We do we actually are in a nice position because we look at a lot of the transactions that are occurring at car dealers across country, we look at what's happening on the Internet and we're able to, you know, do an analysis on a whole variety of areas. I think the analysis you are talking about is one we released yesterday which is sort of a look back at Cash For Clunkers and what really was the impact.
GLENN: Who was the impact?
ANWYL: Well, it was a couple of things that we saw. The big question anytime there's any sort of incentive, you know, whether it's an incentive from the manufacturers or in this case an incentive from the government is what would have happened if the incentive wasn't in the marketplace. And it's kind of a tricky thing to get at but our statisticians actually came up with a pretty novel idea and that was that we could if you look at Cash For Clunkers, it was a pretty complicated program. Not every vehicle qualified. And that by and this is a little complicated but by looking at the relationship between the vehicles that did qualify and the vehicles that didn't, both before, during and after, you are actually able to mathematically create a picture that says, well, here's what would have happened if we didn't have Cash For Clunkers and here's what, obviously what did happen. And then by comparing the two, you can do some simple math that says, well, you know what? As a result of this program, costs about $2.8 billion, we ended up selling in the neighborhood of 125,000 units that wouldn't have been sold this year anyway.
GLENN: So then how much did you ready for this, America? Strap yourself in. How much did Cash For Clunkers cost America per vehicle that is a car that, you know, wasn't going to be purchased?
ANWYL: He yeah, that's the key thing. So in terms of cars that were not going to be sold anyway this year, somewhere in the neighborhood of $24,000. So it's obviously a lot of money.
GLENN: Okay. We spent as taxpayers $24,000 per vehicle for cars that weren't going to be sold?
ANWYL: Anyway, yeah. That's pretty normal. When you look at the math on any kind of incentive program, the numbers get very scary. They are usually in the tens of thousands of dollars. So this in some ways is no different than most incentives.
PAT: Yeah, but this was a taxpayer incentive.
ANWYL: That's the big thing, yeah.
PAT: If the car company, if the auto manufacturer wants to take the loss, fine, whatever. But that's us.
ANWYL: Well, I think that's one reason why the car companies, a lot of car companies liked the Cash For Clunkers.
GLENN: Of course. So $24,000, what was the average price of the cars that were sold?
ANWYL: About the same actually. Somewhere in the low 20s. You could be a, you know, real skeptic and say, hey, why don't we just give cars away. Obviously you won't know who the incremental buyers were. So that's not possible. But it certainly makes a point.
GLENN: I don't care who the buyer why not just give away the cars? I'm sorry to be real skeptical here. Why not just give away the cars? I mean, why wouldn't we just I mean, this is crazy. Now let me follow up with this. What's happening now that we have all '09s coming out I mean the 2010s coming out.
ANWYL: 2010, yeah.
GLENN: We had the 2009s that were sold. Now we have all these new cars that have that was inventory. That was past inventory.
GLENN: Tell me what we have coming off line and how is the auto industry doing and how are the car dealerships doing now that Cash For Clunkers is over?
ANWYL: Well, there's a couple of things happening. One is that right in the aftermath, the program ended the end of August, last week of August. The car sales really plummeted. So the month of August and September were pretty poor. From a consumer perspective it was not a great time to be buying because one of the things that happened through the program is inventories got really light and prices actually jumped up. So it hasn't really been reported. But if you bought a car, say the beginning or middle of August, you paid on the average $500 to $1,000 more than you would have done otherwise. Just because inventories were tight and this is all about supply and demand. So if you bought if you had a clunker, that wasn't so bad because you got an extra $2,000 or $3,000 more than your car was worth but if you did not have a clunker, you ended up paying that premium anyway. So from a consumer perspective that's not great news. If you are a dealer, that's great news because obviously, as they should, they want to make as much money as possible. So inventories got very tight. But it was bit unbalanced. So one of the things we're seeing this month is that there's still some remaining 2009s out there and the manufacturers I think that are going to be doing the best in October are the ones that still have those cars on sale. Big question's going to be going forward, how are the 2010s received because the discounts won't be as great and prices might be a little bit higher. And that's really key to the economy.
GLENN: How about we change the meaning of clunkers to mean cars you purchased in the summer of '09 and we do another Cash For Clunkers?
STU: $100,000 per vehicle this time.
GLENN: That would be great.
PAT: That's a good idea.
STU: Four times as good.
PAT: You get a scar and a down payment on a house.
ANWYL: There you go.
GLENN: How about Maybachs for midrange vehicles? We give everybody a $450,000 Maybach for your midrange sedan.
PAT: Can I put that money instead toward a Veyron?
GLENN: No, no. You have to have a Maybach.
PAT: All right.
GLENN: What do you think?
ANWYL: Well, I think the point you are raising is an interesting one and that is that these things are slippery slopes. So when you start sort of stimulating one area of the economy, why not other ones. So why not, you know, a program for RV dealers or furniture companies or I mean, there's a lot of people that were hurting.
GLENN: Believe it or not, we have cash for appliances coming.
ANWYL: Yeah, we do. That was baked into the stimulus package.
GLENN: Thank you so much. I appreciate it, Jeremy.
ANWYL: Sure, anytime.