Cash for Clunkers
Remember, just a year ago when the Federal government spent $3 billion dollars on their “cash for clunkers” program? Car buyers got a $3,500 to $4,500 check, paid for by taxpayers, in return for trading in their old car.
The government program drove consumer spending to its highest level in eight years in August. But after it ended, so did the growth in auto sales.
In fact, General Motors’ sales plunged 36 percent the following month. Ford plummeted 37 percent and Chrysler 33 percent.
Cash for Clunkers “was a one-time boost of sales followed by a crater,” said Ben Herzon, an economist at Macroeconomic Advisers.
Fast forward one year:
Since last year, prices for used cars have jumped 10% to 35% – thanks to the reduced supply after the government destroyed billions of dollars worth of cars as part of the clunkers program.
Yes, you can thank the brainiacs in Washington who couldn’t wait to destroy perfectly good cars to push us to buy new “green” cars. Of course, the ruling class in DC doesn’t drive – they are ‘driven’ in large, gas guzzling SUV’s and limos. One more instance of do as we say, not as we do.
According to Edmunds, 5-million fewer new cars were sold last year…which pares down the used car supply even more.
The used car models jumping the most in price include mid-size SUVs and mini-vans designed to carry around families. Used Cadillac Escalades are almost 36% more. Chevy Suburbans jumped 34% in price. Dodge Grand Caravans are also seeing a 34% increase. BMW X5 is 33% higher. An Acura MDX will run you 29% more.
Edmonds analyst Joe Spina adds, “A lack of confidence in the economy is driving more people to used cars, putting upward pricing pressure on a limited supply of vehicles.
Now, those who need trucks and large SUVs are buying them and in many cases are turning to used vehicles as a way to save money,” he said. ”Prices are high because this demand comes at a time when inventory is low as a result of the current shortage of lease returns and trade-ins for vehicles of this type.”
There is no longer ANY intelligent life in Washington. We’re on our own, folks.