Used car prices rise after 'Clunkers' program

Forums: Autos, Economy, Cash For Clunkers
Email this Topic • Print this Page

http://www.tuscaloosanews.com/article/20090908/NEWS/909089991/1007?Title=Used-car-prices-rise-after-Clunkers-program#

Quote:

MONTGOMERY | The popular Cash for Clunkers program helped new car dealers, but it is dramatically raising the price of relatively inexpensive used cars, hurting the poor, dealers say.

The Car Allowance Rebate System, commonly called Cash for Clunkers, took 690,000 operable cars out of the market, which is beginning to reflect effects of the shortage.

A smaller supply of used cars over the next six months will affect the auto parts market that lower-income drivers and hobbyists rely on to keep their older cars running.

Ronnie Watkins is a Ford dealer in Gadsden. He said he told his car buyers not to even attend a recent auto auction for used cars because prices have gone up.

“I bought 20 Ford Fusions from a wholesaler about 3 weeks ago,” Watkins said. “This car has now gone up over $1,000.”

Greg Peeples is general manager of Leigh Automotive Mercedes-Benz dealership in Tuscaloosa. “Prices are up and there is definitely a shortage of used cars,” he said Thursday.

Peeple said because so many new cars were sold in Cash for Clunkers and are only slowly being replaced, dealers needing more used cars are finding them going up in price. At this time of year when the model year changes used car prices usually go down.

Jesus said that a man can't serve two masters. In this case, democrats serving their green masters have screwed lower income people who they also claim to serve.

Topic Stats
Top Replies
Link to this Topic

Type: Discussion • Score: 2 • Views: 4,489 • Replies: 21

No top replies

@gungasnake,

This outcome was predictable, was predicted. There is a good argument to be made that we should make older more polluting cars cost more to operate than has been the historical norm, so as to move them to the shredder. There is a segment of the green lobby that considers the increase of cost of buying and operating a old car as one of the benefits of the clunker program.

1 Reply

@hawkeye10,

"older more polluting cars"....

Like these??

http://www.youtube.com/watch?v=waj2KrKYTZo
http://www.youtube.com/watch?v=3SXA1oZnj98

Real "older more polluting cars" generally go for a good deal less than the 4500 which Uncle Sam was paying out for clunkers. That Volvo would have made somebody a very nice car for ten years starting from now and one senator even tried to implement an idea for distributing such cars to the poor who could use them and the idea was shot down by a straight party-line dem vote, the only holdout being Web of Virginia.

0 Replies

The true 'green' way of getting polluting cars off the road would have to been giving $4500 for cars that get less than 18 mpg, and trading them in for USED cars (greater than 5 years old) that get more than 28 mpg.

This whole program was a VERY wasteful exercise.

1 Reply

@maporsche,

That would have been much better, especially since there are lots of people who couldn't pay for a new car, even with a $4500 discount. Not to say that some of them didn't do the deal, anyway.

1 Reply

@roger,

You can get an Elantra for $14 k, so financing the $10K for 60 months will get a $200 a month payment. Considering that you get a warranty and thus little out of pocket costs for years one did not need to be very well off for the clunker deal to make economic sense.

0 Replies

Of course, the people who own the cars are better off because of the rise in prices.

0 Replies

@gungasnake,

There is never a black and white/right or wrong. I only hope that some people really benefited from this deal, cause there are some people who really need help anyway they can get it.

1 Reply

@rich8ames,

Nobody "benefited" from this ****. All this was, was a bone tossed off to Oinquebama's green-whacko constituency and even those losers didn't benefit from it. They'd no doubt tell you that the Earth "benefited" but Gaea worship is basically a form of idolatry and sacrificing real human needs and economic issues to Gaea is no better than the practices you read about in the Old Testament in which children were sacrificed to stone idols.

0 Replies

Quote:

Cash for Clunkers: Good for dealers, automakers, bad for taxpayers
Car sales and research site Edmunds.com estimated today that each new car sold under the Cash for Clunkers government subsidy program cost the American taxpayers more than $24,000.

Edmunds estimated that 82 percent of vehicle sales during the program would have happened anyway (then or at some point in the near future), so the program only enticed about 18 percent of the buyers who participated in the program, which moved 690,000 new vehicles off the lots of very relieved dealers.

This means that the much-touted government program only got 125,000 new vehicles on the road than already would have gotten there without a government subsidy.

Edmunds' math goes like this: 690,000 vehicles sold with the $4,500 subsidy during the program divided by 125,000 new vehicles equals more than $24,000 for each new vehicle, or the amount ponied up by the American taxpayer.

http://voices.washingtonpost.com/economy-watch/2009/10/cash-for-clunkers_good_for_dea.html?hpid=news-col-blog

that is, shall we say, significant

1 Reply

@hawkeye10,

pretty strange methodology

2 Replies

@dyslexia,

Edmunds is hugely respected, I would be shocked if their method was flawed.

1 Reply

@hawkeye10,

Quote:

690,000 vehicles sold with the $4,500 subsidy during the program divided by 125,000 new vehicles equals more than $24,000 for each new vehicle, or the amount ponied up by the American taxpayer.

that is pretty strange methodology Edmunds or not.

1 Reply

@dyslexia,

What is strange about it?

You take the forecasted sales w/o the government program, you then add in the increased sales above what you forecasted to get the net impact of the cash for clunkers program.

For example, there is a forecast for the month of November. If the government creates a program, you measure it's effectiveness by seeing how much better November comes in over/under your forecast.

You cannot attribute every car sold during that time to C4C. If there were no C4C, cars would have still been sold, no?

1 Reply

@maporsche,

the only thing off is why use the $4.5k figure? We know the program costs, which is all of the rebates plus the program admin costs. There is no need to guesstimate the tab paid, we have the bills.

1 Reply

@hawkeye10,

Not sure why they did it that way, but I can guess.

In my line of business I'm responsible for providing numbers and presenting them in a way that makes sense for the largest number of people. Not all people are numbers people.

The cost per unit measure is a common one in business as it breaks down large abstract dollars into something that people can understand. It doesn't make sense for every scenerio or presentation, but it does come in handy.

Maybe that's what Edmunds was doing.

1 Reply

@maporsche,

or maybe the Obama administration is refusing to provide the accounting....How much are they paying which ever bank it was that ran the program? I don't know, but the government does. The program is still costing, as it is not over until all of the cars are crushed, which was supposed to be in about 4 months, but the word is that the dismantlers have already asked for an extension because they can't work that fast.

1 Reply

@hawkeye10,

Sorry, I wasn't sure where you were going at first.

Yes, I too would like to know what the total costs were. I assume that the 3 billion or so they voted on would include any administrative costs. Is that an incorrect assumption?

1 Reply

@maporsche,

I switched gears, I think that the total program cost is known, but now that I think more about it it may be that Edmonds can not get their hands on the data so they took an estimate approach. Some of the cars rebated at $3.5K, but maybe they assumed $4.5 K for all in order to account for the program admin costs.

IDK, but someone should ask Edmunds why they did not use hard cost data.

1 Reply

@hawkeye10,

If the cost was truly 3 billion, and the numbr of cars sold was truly 690,000, then the actual cost / car was $4,348. That's pretty close to the number Edmunds used.

1 Reply

Used car prices rise after 'Clunkers' program

Related Topics

Quick Links

My Account

able2know