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A year ago, cash-for-clunkers spurred sales, but did it work

USA Today -- When August auto sales come out Wednesday, it isn't going to be pretty.

The year-over-year sales decline for the month will look terrible — down an estimated 30% — because the comparison will be with the buying frenzy fueled last August by the government's cash-for-clunkers program.

The program gave as much as $4,500 to buyers who traded an older car or truck for a new car with higher fuel economy. Its aim was a shot in the arm for auto sales at a time when consumers were not buying because of growing job losses, bank failures, automaker bankruptcies and tight credit. Without that government boost, supporters say, the auto industry — and the U.S. jobs dependent on both domestic and foreign makers — would have imploded and dug the economy into an even deeper hole.

Did it work?

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Submitted Aug 31, 2010 By: BurntOrange

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ramammoth Champion Author Modesto Posts:1,389 Points:278,565 Joined:Mar 2007	Message Posted: Aug 31, 2010 1:41:11 PM Ignore ramammoth Report Abuse Cash for clunkers worked. It was a short term program and helped sell cars. But, these short term programs are not the answer to a good long term economy. Just like the tax rebate checks under Bush, just a one time boost, like a sugar high. It's time to reveal a plan now, not more short term boosts. [Edited by: ramammoth at 8/31/2010 1:41:44 PM EST]
SVmike Champion Author California Posts:1,426 Points:307,850 Joined:Dec 2009	Message Posted: Aug 31, 2010 1:31:56 PM Ignore SVmike Report Abuse "From my perspective, the Cash for Clunkers was another stupid waste of my tax money by this administration" +1
MAC48 All-Star Author Dallas Posts:728 Points:499,925 Joined:Dec 2006	Message Posted: Aug 31, 2010 12:32:37 PM Ignore MAC48 Report Abuse From my perspective, the Cash for Clunkers was another stupid waste of my tax money by this administration. The one thing that really was a horrible idea to me was the crushing of the vehicles traded in when a buyer bought a new vehicle under the program. If the traded in vehicles had been returned to the used car market, then the ones that were resalesable would have replaced second, third & fourth generation autos built in the 80s & early to mid 90s with used vehicles built more recently. This would really have resulted in the removal of a lot of really old & inefficient vehicles instead of removing a bunch of late 90s & early 2000 generation vehicles. To me this approach would have helped achieve one of the stated goals of the Cash for Clunkers program which was supposedly to increase the fuel efficeincy of the vehicles on the road today. Another example of "change we can NOT believe in".
packards42 Champion Author Washington Posts:4,239 Points:717,270 Joined:Feb 2005	Message Posted: Aug 31, 2010 9:57:39 AM Ignore packards42 Report Abuse It was just another way to shirt the simulates money around and charge the taxpayer, another hidden tax, in the same for EV cars/
realtorguzzler Champion Author Florida Posts:1,488 Points:259,210 Joined:Jun 2010	Message Posted: Aug 31, 2010 9:49:04 AM Ignore realtorguzzler Report Abuse Cash for Clunkers was to bail out the American car manufacturers. Instead the few that can take advantage of the program, many were trading in with non-American cars. It was a temporary fix hoping for a pie in the sky but the long term result is debt for a future generation. The program was not to take clunkers off the road. If it were then the criteria was flawed. Govt officials responsible for this project should think it through rather than just racing to present a "change".
52MPG Champion Author Dayton Posts:4,909 Points:1,277,505 Joined:Apr 2006	Message Posted: Aug 31, 2010 9:44:29 AM Ignore 52MPG Report Abuse "While the program offered a boost, the bottom line is that car sales won't fully recover until consumers regain confidence in the economy and their own job prospects, says Jesse Toprak, vice president of industry trends and insight for TrueCar.com. Otherwise, the industry will continue to struggle, he says. "Low consumer confidence remains as the main counterforce for a healthy recovery."" Does anyone have confidence in this current government administration?
RoadManJimC Champion Author Chico Posts:1,231 Points:181,340 Joined:Aug 2010	Message Posted: Aug 31, 2010 9:33:08 AM Ignore RoadManJimC Report Abuse 'Not Exactly'! It increased 'New Car Sales', but took thousands of perfectly good Used cars off the market. I feel bad for the people that can no longer find a 'Cheap Used Car'! This is just another 'Government Project' that was 'Poorly Handled'!!
GingoutMD Champion Author Maryland Posts:2,302 Points:473,680 Joined:Jan 2010	Message Posted: Aug 31, 2010 9:28:21 AM Ignore GingoutMD Report Abuse I was not in the market for a vehicle when I heard about the Cash-for-Clunkers program about 6 months before it started. I decided that if the program would actually get under way that I would trade in my old gas guzzler (Custom-built 1996 Ford Econoline with a 5.2L V8 that got 13mpg) for a new hybrid. I was fortunate enough to partake in the Cash-for-Clunkers program and love my 2010 Ford Fusion Hybrid. With all the incentives, deductions, credits, and "Clunker" money I was able to break even on the extra cost of the hybrid within 12 months.
JimTee Champion Author Tampa Posts:2,322 Points:1,190,700 Joined:Apr 2006	Message Posted: Aug 31, 2010 9:06:57 AM Ignore JimTee Report Abuse It was a short term solution for a long term problem.
gs7101 Champion Author San Antonio Posts:3,203 Points:245,355 Joined:Jun 2009	Message Posted: Aug 31, 2010 9:02:14 AM Ignore gs7101 Report Abuse Did it work? The people who were able to take advantage of the program would say it worked for them. I wasn't in that position.
chemist74 Champion Author Cleveland Posts:12,377 Points:2,177,015 Joined:Apr 2005	Message Posted: Aug 31, 2010 8:51:02 AM Ignore chemist74 Report Abuse Both the cash for clunkers and home rebate for new buyers really did not create many new additional buyers but simply took customers who would have bought in the later part of 2010 or in 2011 and caused them to buy earlier. If the recession had been short, this temporary sales boost could have helped the industries hold out until the economy recovered. Instead, it has resulted in a sales boost followed by along with a bigger national debt.
Bussman Champion Author Dallas Posts:3,864 Points:992,595 Joined:Nov 2008	Message Posted: Aug 31, 2010 8:27:06 AM Ignore Bussman Report Abuse Last point of this article needs to expand to say...And low consumer confidence in the economy stems from low citizen confidence in its elected officials. "Change We Can Believe In"...not!