What Happens When Government Makes a Concerted Effort to Eliminate Old Cars?

Used cars get rarer and more expensive, natch, though this Wall Street Journal article today on the phenomenon of surging prices in used cars--$1,500 to $3,000 more than six months ago--never once mentions the words "cash for clunkers"--a program that removed 690,114 cars from the potential secondary market.

Reason writings on the madness of destroying useful things to stimulate "the economy."

Comments

[AU H20]

Y'know, the sheer mass of posts today still isn't going to make up for the lateness of the morning links.

Reason editors, you're sleeping on the couch tonight.

[Rather]

You fuck the reason editors 😉

[Episiarch]

rectal, your insipidness and banality are only exceeded by your girth. Can you even leave the house without the Fire Dept. breaking down a wall?

[rather retarded]

I haven't paid my phone bills in years. I do leave the apartment every few months, but I need to fast a few days before and use extra cat urine as lubrication.

[rather pointless]

^^

[Johnny Frost]

fortunately plenty of commenters made the writers painfully aware of Cash for Clunkers.

[Trespassers W]

Come on, it's not because of Cash for Clunkers. Surely it's just raging inflation.

[R C Dean]

Oh, well, that's OK then.

[Jason]

It's a feature, not a bug.

[CatoTheElder]

Liberals did C4C to help poor people. They understand that poor people should ride buses and trains, not drive cars. C4C makes cars prohibitively expensive for poor people. Liberals are also helping with policies that make gasoline and insurance is unbearably expensive for poor people.

[Psssst]

First word should be "Used"

Unless you mean cars that vote for Ron Paul and are thusly addicted to heroin.

[progressive auto dealer]

First word should be "Used"

Ahem. Shouldn't that be pre-owned?

[Hugh Akston]

pre-loved

[Binky]

The government's Cash for Clunkers program resulted in 690,114 transactions worth $2.88 billion, according to the Department of Transportation.

And this "worth" was computed ... how?

The program also created or saved an estimated 42,000 jobs during the second half of the year, according to the White House.

Oh. Never mind.

[heller]

No, about $3 billion is how much they gave away for those cars.

[heller]

No, about $3 billion is how much they gave away for those cars.

[Bamboo Floors for Cheap!]

Spell-o in first word of the post.

[johnl]

Cash for clunkers also made old cars older, by exempting "classic" cars like my 1977 Dodge Colt.

[Amakudari]

The solution: a government program to help those who can't afford a car purchase one.

We also need to step up funding for an expansion of Cash for Clunkers, which as you may recall was a raging success.

[Hugh Akston]

Post SEAL snipers on rooftops near freeway offramps, have them puncture the engine blocks of clunkers (defined as any car a DC staffer wouldn't be caught dead in).

New car sales. Jobs created or saved. The economy gets back on track.

[Jason]

Wouldn't it be easier to shoot out random windows?

New (double pane) window sales. Green jobs created or saved. The green economy gets a boost.

[heller]

What Happens When Government Makes a Concerted Effort to Eliminate Old Cars?

The completely predictable.

[Brian Doherty]

"User"/Used should be fixed, thanks.

[JMK]

In the end, cars are all junked.

[Go Horns!]

The article states that used fuel efficient cars are rising in price and that vans, SUVs, and pick-ups are stagnant in price. What cars were the top ten trade-ins for cash for clunkers?

10. Ford Windstar (front-wheel drive)
9. Ford F-150 (four-wheel drive)
8. Chevrolet C1500 (two-wheel drive)
7. Chevrolet Blazer (four-wheel drive)
6. Jeep Cherokee (four-wheel drive)
5. Dodge Caravan/Grand Caravan (two-wheel drive)
4. Ford Explorer (two-wheel drive)
3. Jeep Grand Cherokee (four-wheel drive)
2. Ford F-150 (two-wheel drive)
1. Ford Explorer (four-wheel drive)

If cash-for-clunkers caused used car prices to go up, why did the values of the top ten cars stay stagnant? More importantly, cash-for-clunkers put more fuel efficient cars on the road and those are the ones where used prices are rising.

Maybe someone should actually crunch some numbers before jumping to the conclusion that supports their predetermined view.

Full disclosure - I hated the program because I wanted new car prices to fall.

[Corporate Drone]

I'll take a swing at it. Ordinarily, $5/gallon gas would make these gas guzzler SUVs and trucks so unappealing that they'd have to sell for a lot less on the used car market.

Since some people tend to buy SUVs and trucks to serve a purpose (say, hauling stuff, for example) which cannot be done with a used Geo Metro -- there will always be a demand for 4x4 trucks and SUVs.

Therefore, with a limited supply of these vehicles (thanks to cash-for-clunkers) these prices have remained flat rather than dropped. According to the people I talk to in the auto-remarketing industry; those types of used trucks and SUVs are simply GONE from the market. Supply, meet demand.

Why would you want someone to sell you a new car at a loss? Do you think that's good for business or something?

[Mo]

Wouldn't cash for clunkers have lead to a peak in late 2009/early 2010*? I know that when I was looking for used cars in that period of time, the prices were significantly higher. That said, C4C was an idiotic program.

* Since that's when used car supplies were lowest.

[Martin]

Come on, do you seriously think taking entry level vehicles out of the supply chain hurts the poor?? It's good for them.

[air max pas cher]

huhu

[Ken Shultz]

It's okay if the price for used cars goes up (especially clunkers), 'cause it's mostly poor people and college kids who need those cars anyway...

...and those two groups of people are so stupid, they're gonna reelect Obama anyway!

At least that's what Barack Obama thinks. I'd like to think they're smarter than that, but I guess we'll just have to wait and see.

[SIV]

Think of the collective social benefit as they take public transportation. The exposure to diversity. They should be grateful to be steeped in the community of it all. Wouldn't want them to be bowling alone.

[John]

+1 and plus the internets for the idiotic "bowling alone" reference. Well played sir.

[rather]

I'd love to know how many of you 'libertarians' participated in the scheme.

I heard zombie Ayn Rand dropped off her car after picking up her social security, and free treatments for cancer

[rather retarded]

I say you're too libertarian! (drink?)

No wait, you're not "libertarian" (drink?) enough!

No wait...

[Ken Shultz]

Because being libertarian is all about not doing what's in our own best interests?

Is that what we're supposed to think?

There isn't anything unlibertarian about altruism, but whoever told you a commitment to altruism was part of the libertarian purity oath?

Just plain lied.

P.S. God forbid people get some of their tax money back: is that what we're supposed to think?

[Rather]

I don't feel like playing
J sub D died

[John]

wtf?

[Rather]

It is on my blog but you might prefer Jennifer or thoreau

[John]

I am not part of the Reasonite jihad against you Rather. So yours will do fine. And that is just bloody fucking awful.

[Dello]

"I'd love to know how many of you 'libertarians' participated in the scheme."

I did. I'm a mechanic, and I've sold 3 used cars since C4C at FAR higher prices than I could have before it.

I think C4C sucks, but I DO know how to make lemonade.

[Max]

Who gives a flying fuck?

[Emily Litella]

What's all this nonsense I'm hearing about "cash for spelunkers?"

Why do we have to pay these people anything? If they want to go down and root around in some dry and musty old hole they should do it on their own time! The taxpayers shouldn't have to pay one thin dime! Ha I made a rhyme.

[The Clunker]

Soon, the clunkers will be worth a lot more cash. Because cash is cheap and getting cheaper all the time. Because they eased the quantity of it, qualitatively. Or something like that.

Anyway, dollars are rusting out and loosing value faster than cars these days is what I was trying to say in some really neat-cool way. But somehow the language just isn't cooperating tonight, so sorry.

Let's just say Obama and the liberals all suck the big one. And the small one. And all the other ones.

[g?nstig mbt]

postpone planning in a way that could result in the state's effectively rejecting federal high speed rail funds.

[Barely Suppressed Rage]

Just imagine how the new housing market will boom once the government starts paying people to tear down houses built before 1978!!

[me/dwc]

You know what is most sickening? It's that the nitwits who came up with this cash for clunkers horseshit thought it was not only great policy, but really, really clever.

[Hobo Chang Ba]

Yeah, I've definitely noticed to jump. Searching for a used car, which hopefully I will buy today and the prices really are about $1-2k more than they were at this time last year (the last time I was shopping). Friggin unintended consequences.

[INFORG]

With the disclaimer that I of course hate the C4C program, I do believe we are witnessing something more than just that effect.

It seems logical to me that prices are moving upward quickly based upon a weaker dollar, increasing commodity prices, and a smaller supply of new cars produced for several years. The C4C didn't help anything, but should have already been priced in.

I bet if someone looked at used car prices, they would trend inversely to new car production with some lag. I'd further guess that higher gas prices drive higher used car prices.