Now all of a sudden she started to knockin’
And down in the dips she started to rockin’
I looked in my mirror; a red light was blinkin’
The cops was after my Hot Rod Lincoln
(C. Ryan/WS Stevenson Hot Rod Lincoln)
It seems the Cash for Clunkers program has started to knockin’, so to speak. CNN is reporting that interest in the program is falling and sales are dropping like a rusted-out muffler.
Interest in Cash for Clunkers has fallen 15% since its peak, and the number of people planning to buy cars could fall to pre-Clunkers levels by next week, an auto research group said Tuesday.
Under the Clunkers program, which launched July 27, vehicles purchased after July 1 are eligible for refund vouchers worth $3,500 to $4,500 on traded-in cars with a fuel economy rating of 18 miles per gallon or less.
The program proved wildly popular, running through its initial $1 billion in its first week and leading lawmakers to approve an additional $2 billion in funding on August 7.
But interest in the program peaked on July 29, and demand has waned, according to the report from Edmunds.com.
The report, which cited Internet shopping data, said if current trends continue auto purchase intent will fall back to pre-Cash for Clunker levels by August 20.
I read something from the head of Edmunds a short while ago that argued that the C4C was a bad idea – and re-funding it was an even worse one.
I love a good sales surge as much as anyone. But it’s not that simple. First, it’s not clear that cash for clunkers actually increased sales. Edmunds.com noted recently that over 100,000 buyers put their purchases on hold waiting for the program to launch. Once consumers could start cashing in on July 24, showrooms were flooded and government servers were overwhelmed as the backlog of buyers finalized their purchases.
Secondly, on July 27, Edmunds.com published an analysis showing that in any given month 60,000 to 70,000 “clunker-like” deals happen with no government program in place. The 200,000-plus deals the government was originally prepared to fund through the program’s Nov. 1 end date were about the “natural” clunker trade-in rate.
I posted about this just yesterday. That was regarding a USA Today report that the C4C was driving up used car prices, hurting the poor the most.
In other words, this is yet another “brilliant” and “popular” government program that has more unintended negative consequences that actual positive benefits. This one shelling out only a paltry $3 billion (once real money, now noise on the system in Obama budget deficit space).
How do you think this bodes for massive Democrat-pushed programs like crap and tax and health care “reform”? If they can screw up $3 billion, do you really want them to start playing with trillions?