Will used car prices increase thanks to Cash for Clunkers
KBB Forecasts Used Car Price Bubble
Used car prices will often fluctuate depending on the popularity of the vehicle as well as other factors including the price of gasoline. Indeed, in 2008 owners of compact cars saw their prices increase as gasoline topped four dollars a gallon. Getting 30 mpg on the highway is certainly advantageous when pump prices are high resulting in an increase in used car values.
Kelley Blue Book (KBB) is seeing another factor play in with the used car market and that factor is the federal government’s car scrappage program. Called “cash for clunkers” by consumers, the Car Allowance Rebate System (CARS) program has already removed about 250,000 used cars from the market, with an additional 500,000 slated for scrappage as the program is extended thanks to two billion dollars in additional funding.
KBB says that the clunkers program is removing used car inventory at a faster rate which means that dealers are stocking up on used car inventory while they can. This quest for used cars is pushing up prices, creating a bubble scenario.
http://www.autotrends.org/kbb-forecasts ... ce-bubble/
Re: Will used car prices increase thanks to Cash for Clunkers
While there's pluses to this program there's also big minus as this article mentions. Some of these "clunkers" would have made for affordable vehicles for people who can't afford a new car, now as used car prices increase it makes this option less affordable as well. My other problem with this program is its not equally accessible for many people. Someone could have an old "clunker" but if the EPA gas estimates put it higher then 18 mpgs you get squat. The last problem is this is not a long term solution to slow car sales, when the money runs out so will the buyers from the showrooms. Next year car sales will be down double digits when compared to this period of time this year.
Re: Will used car prices increase thanks to Cash for Clunkers
Edmunds.com basically debunked the usefulness of the entire program and the numbers being touted by the DOT and Obama administration...
* Despite the struggling economy and credit problems, before the program started, there were still about 60,000-70,000 trade ins of low mpg vehicles for new, higher mpg vehicles every month. The original funding was only meant to pay for 200,000 cars, or about three months of deals at the existing rates. Of course those deals were accelerated into the space of four days, which depleted the initial $1 billion.
* There were over 100,000 people ready and able to buy new cars months ago who postponed their purchases specifically to take advantage of the free government money.
* Car companies slowed the assembly lines on their fuel efficient models due to the low fuel prices and reduced demand. These cars are going to be the first to run out, which will raise their prices and drive consumers to less expensive, less fuel efficient models.
I'm happy for all the people who took advantage of the deal, but at the end of the day it is pork legislation with few benefits to the masses.
Re: Will used car prices increase thanks to Cash for Clunkers
FAIL to CASH for CLUNKERS. Why?
the new MPG requirement is terribly low to qualify, therefore negates the entire purpose of the program.
Re: Will used car prices increase thanks to Cash for Clunkers
I can see all points as to the disadvantages of the program, but I don't see how it's tough to qualify.
I got $4,500 going from a 12mpg to a 26mpg. If you car is from the 90s and gets poopy mileage, then it quals. If qualifications were a challenge, then they wouldn't have burned through the cash to fast.
Re: Will used car prices increase thanks to Cash for Clunkers
Quote:
Originally Posted by Phil D.
I got $4,500 going from a 12mpg to a 26mpg.
Yep, but you could have bought an 18mpg Hummer and still gotten the $$$.
Re: Will used car prices increase thanks to Cash for Clunkers
Quote:
Originally Posted by GothamSpotter
Yep, but you could have bought an 18mpg Hummer and still gotten the $$$.
Not by trading in his pickup he couldn't - according to the CARS.gov web site, none of the Hummer SUVs get 18mpg, the only way he could have gotten the money was to get the H3 pickup, since it is a "Class 2 Truck" like the Chevy, and gets 16mpg.
Re: Will used car prices increase thanks to Cash for Clunkers
My truck was considered a 13mpg truck according to the CARS site.
Also mind you, I would not have gotten a new vehicle if the program didn't exist.
But that's just my one example.
Re: Will used car prices increase thanks to Cash for Clunkers
Quote:
Originally Posted by Phil D.
I got $4,500 going from a 12mpg to a 26mpg.
Phil, there is NO such thing as a free lunch. You'll end up paying that back over time in the form of taxes. Consider it a loan with a new car as a perk
Re: Will used car prices increase thanks to Cash for Clunkers
Quote:
, and can park in front of my house without waking up neighbors. :)
\
From Growler to Prowler. Awwww. How's does the eunich life feel? Any problems adjusting ? :D
SEriously, Im glad its a huge plus for you. I think folks in your position are really the intended target. you had a clunker and a nice incentive. winwin
Re: Will used car prices increase thanks to Cash for Clunkers
Quote:
Originally Posted by GothamSpotter
Yep, but you could have bought an 18mpg Hummer and still gotten the $$$.
Quote:
Originally Posted by moose135
Not by trading in his pickup he couldn't - according to the CARS.gov web site, none of the Hummer SUVs get 18mpg, the only way he could have gotten the money was to get the H3 pickup, since it is a "Class 2 Truck" like the Chevy, and gets 16mpg.
The Hummer is on the approved trade-in list
http://www.edmunds.com/cash-for-clunker ... tes.html#h
2009 HUMMER
H3T 3.7L 5cyl 5M 4WD
Category 2 Truck
Re: Will used car prices increase thanks to Cash for Clunkers
Quote:
Originally Posted by Midnight Mike
Quote:
Originally Posted by GothamSpotter
Yep, but you could have bought an 18mpg Hummer and still gotten the $$$.
Quote:
Originally Posted by moose135
Not by trading in his pickup he couldn't - according to the CARS.gov web site, none of the Hummer SUVs get 18mpg, the only way he could have gotten the money was to get the H3 pickup, since it is a "Class 2 Truck" like the Chevy, and gets 16mpg.
The Hummer is on the approved trade-in list
http://www.edmunds.com/cash-for-clunker ... tes.html#h
2009 HUMMER
H3T 3.7L 5cyl 5M 4WD
Category 2 Truck
Right, like I said, he could get the Hummer pickup (not the SUV) since he was trading in his truck - the H3T is the pickup version:
http://moose135.smugmug.com/photos/6...19_FTju7-M.jpg
If you are trading in a car, you can't get the rebate on the Hummer pickup, and no matter what you are trading, you can't get the rebate on the Hummer SUV.
