No Cash for American Clunkers

Thursday, October 1, 2009
Posted in category Economics

Apropos my article on Cash for Clunkers from yesterday, here’s some follow-up to support my points. September sales for GM were down 45% and and for Chrysler the number was 42%. When the government stopped subsidizing the purchase of cars, people stopped purchasing them – a point made very clear in my article. I also pointed out the distortion in the used car market. Yesterday the Wall Street Journal reported on the rise in prices of used automobiles – that is, the ones left over that weren’t destroyed by government decree:

One widely followed measure of used-car prices, the 14-year-old Manheim Used Vehicle Value Index, will likely hit a record when data for September are released in early October, says Thomas Webb, chief economist for Manheim Consulting, a subsidiary of Cox Enterprises Inc.

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2 Responses to No Cash for American Clunkers

  1. Shannon says:

    October 1st, 2009 at 11:03 pm

    So, what was the answer to the economic woes? Put a bunch of spendthrifts (who eat breakfast at Cereality) into new vehicles they cannot afford, using a $4000 down-payment (miniscule) for a $50,000 vehicle that will inevitably be repossessed. Meanwhile, the money conscious consumers will be lucky if they can find affordable vehicles. “But don’t worry!” hail the elites. “We’re putting in bullet trains to transport those who can’t afford to drive.”

  2. Cars4Charities says:

    October 2nd, 2009 at 11:45 am

    The cash for clunkers “hangover” was not unexpected. Neither was its negative effect on auto repairs and car donation.

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