The Cash For Clunkers program in the United States might have worked too well. Under this program, people could turn in older, less fuel efficient cars for new cars and get up to $4,500 for their old clunkers. Critics asserted that all it would do is steal future sales and provide only a temporary increase in car sales.
Well, according to Ralph Schroeder from www.aaegroup.com, car sales in September (which was the first month AFTER the Cash For Clunkers program ended) were down by 45% at GM and 42% at Chrysler. He also goes on to note that researchers at the University of Delaware added up all the benefits and costs of the program and found that there was a net COST of $2,000 per vehicle for the program (benefits were reduced gas consumption, environmental improvements and some other items). So given that 700,000 cars qualified for the program, he states “the program made the nation as a whole $1.4 billion poorer.”
The story was emailed to me, and I can’t find a link, but you can visit Ralph Schroeder’s website at www.aaegroup.com.