Cash for Clunkers Good Through Tuesday

JonathanErnst-Reuters If you’re confused by what’s going on with the Cash for Clunkers program, you’re not alone. The most important thing to know is that according to Transportation Secretary Ray LaHood and the White House, the program will run at least through Tuesday. That means if you’re still thinking about taking advantage of the $3,500-$4,500 voucher, it’s best you get to a dealership quickly.

The future of the CARS program after that will depend on the U.S. Senate. The House of Representatives has already passed a $2 billion extension, taking the money from a renewable-energy loan program. Because the House is already on vacation, the Senate must approve this same measure without amendments if the program is going to continue.

Cash for Clunkers has come under criticism from those who say it’s a bureaucratic mess or that it’s only financed the wealthy as they purchase cars they would have bought anyway. However, the fact remains that the program helped sell approximately 250,000 new cars that were more fuel-efficient than the vehicles being traded in. Ford will post the first year-over-year sales increase for a domestic automaker since January 2008.

Chrysler’s showrooms were so slammed it lowered its matching incentive deal because dealers were running out of inventory — this from an automaker that shut down its factories due to bloated inventory just months ago.

It’s still unclear if the Senate will OK the money before it leaves for the August recess on Friday.

Obama Administration Hopeful on “Clunker” Extension (Reuters)

By Stephen Markley | August 3, 2009 | Comments (9)

Comments 

MSS

My local Chrysler-Dpdge-Jeep dealer only has:

7 Jeep

8 Chrysler

16 Dodge [11 which are base Chargers(3) and High end Heavy duty Rams]

CyCarConsulting

Everyone knows now how successful the Clunker program has been. Now think about this. In all the flurry to satisfy those buyers, used car inventory, and used car buyers have been neglected. That means starting now, there are aged units coming up that will have to be sold, for whatever the dealerships can get. As soon as the Clunker program ends ,or at the end of this month ,whichever comes first, there will be deals on those aged units. If you are in the market for a used car, I would suggest you visit your local dealer. Ask the salespeople to show you the aged units. Most likely a bonus on them for the salespeople, and managers ,will be compensation enough , and the likelyhood of not worrying about any profit on the car. A deal for you, if you negotiate hard. You may not even have to negotiate, some stores will have marked the cars down already.The store will lose money, but those units must be sold regardless.

MSS

CyCarConsulting,

The cars from C4C can not be sold. They're destroyed

MSS,
I think he's saying the Used cars already on lots will sit longer as everyone buys new because of the Cash for Clunkers program. It'll be interesting to see if there was any decline. I'm betting used cars saw a boost in July too.

Josh Reiter

There is nothing successful about this. This program is taking tax payer money to destroy productive wealth. It is nothing more than a broken windows fallacy.

sarahsmile90

For those nay sayers, how can you say this program was not successful? 250,000 cars already sold. This was a much better program then bailing out rich bankers so they could get there bonus and go on vacation.

Dan

Josh Reiter -
The broken windows fallacy doesn't apply here. It only applies to pure white elephant programs. Since there is an efficiency gain that is caused by this that exceeds the cost, it actually is a forced investment resulting in a higher economic efficiency and a net increase in real GDP. That does hinge on how long the "clunker" would have otherwise been driven, and unfortunately I haven't seen good statistics on that, but the broken windows fallacy relies on the cost being a pure expenditure which this is not.

Thinkerdude

Of course, the Keynes fanatics believe that hiring one thousand people to open holes and hiring another thousand to fill them is a way to create wealth.

The problem now is how to sell an 07/08 used car, if the new artificial bubble created for the middle class. They want to make happy consumers, even if they can't pay for it.

It is going to be interesting to see how many of the CfC 09's go into repo in a few months. And what is the price paid for them... maybe I should buy used this fall.

Cash for clunkers is bad for used cars sales and for charities who rely on car donation to help fund their programs

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