Cash for clunkers redux – higher used car prices
Last summer’s “Cash for Clunkers” government boondoggle was a typical government FAIL in more ways than one. It caused a spike in auto sales by providing $3B of your money (debt, actually) in incentives to people who most likely would have bought a car anyway. In other words, it pulled future sales into the incentive period. Car sales spiked then returned to the same anemic levels after the program ended. (more here from CNN Money)
Since the program required the destruction of vehicles traded in, this removed a large chunk of inventory from the used car market – with predictable results (story here).
If buying a used car is among your cost-cutting measures…be prepared to pay up to 30-percent more than you did last year.
It is a simple case of supply and demand.
Trouble is…there are fewer used cars.
The cash-for-clunkers program took a bunch off the market.
Plus, Edmunds Senior Editor Bill Visnick says 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.
Visnick says even smaller models are pulling higher prices…an average of 10% more.
The law of supply and demand – not exactly a novel concept. Apparently this little detail was overlooked by the anti-capitalist, anti-business, anti-consumer “geniuses” in government.