Cash for Clunkers did exactly what it was intended to do: It screwed up the used car market for a very long time, simply by decreasing supply while demand remained.
People still needed cars, and everything is relative. When used car prices go up relative to that of new cars, then new cars become relatively inexpensive.
This helps sell more new cars. And back in the time of "too big to fail" auto industry bailouts, selling more new cars was kind of important.
edit: And remember, there were restrictions for Cash for Clunkers. The car had to be less than 25 years old, it had to run, and it had to have been registered and insured for the last 12 months. It was deliberately designed to thin the pool of functional used vehicles.
This program claimed revered cars like Audi Quattros and BMW E30s...along with V8 Mustangs. And once turned in, they were all quite purposefully destroyed: Sodium silicate replaced the engine oil and they were run at WOT until they seized, and then they were crushed just to be sure.
According to Wikipedia only about 677k vehicles were takes out of the market. In 2009 there were about 254 million registered cars in the US so did it really put a dent in the market?
That's the number of "registered vehicles" in the US, which is going to include everything from Joe Everyman's Mazda to every single truck AT&T uses to maintain what they assert strongly is a data network (sorry little snark there). A better thing to compare to would be the number of used cars sold. A quick google says about 35 million sales are known for 2008, comprising dealer, private, and independent sales. Taking the 677k figure at face value, that would amount to roughly 2% of the "moving" supply of vehicles being removed from the market, and worth noting, the taxpayer paid for that. Also worth noting that figure is going to be inherently conservative, because that's "all used vehicle sales" which includes things like rental companies unloading older inventory, logistics companies selling trucks, that sort of thing.
That isn't a ton but it also isn't nothing, and however you feel about it, that's 677,000 vehicles that were, according to the requirements laid out by the program, perfectly serviceable daily-driver vehicles that were in active use, that taxpayers paid to buy from consumers, strictly to destroy them. Irrespective of if it ruined the used market as the GP says, that's still a shit ton of perfectly usable machines that our government apportioned tax money to buy, and then paid contractors to destroy, on purpose.
maybe the used market salesman used it as an excuse to sell used cars more expensive.
how much did the price go up because of 2%? and all other factors excluded. even inflation is 2% a year. so thats one year. sorry but i dont buy it made a dent in the used car market. proof it to me with numbers etc please otherwise it sounds like the usual useless rant about „everything is getting worse without proof“
On aggregate, in a ridiculously-competitive market like commodity used cars that is generally free of collusion, salesmen do not get to determine sale prices.
That's simply not a thing when the other guy down the block will sell a similar car for $300 less and have his money today.
Any salesman can ask for whatever price they wish to ask for, and if it doesn't sell then there is simply no sale. (The annals of Ebay, to name one dataset that can be poked at, is rife with asking prices for things that simply did not sell.)
(This is one of the very few things that the "invisible hand of the free market" actually assures us of: Sure! A salesperson can ask $16000 for a car that is worth $6000. But if they sit on that car for years and years hoping for a bite that never comes, then maybe they can eventually sell it for $3000 -- losing money the entire time, for ever step of the process.
And while that's an example of how sales can happen, it is not an example of how sales both work and make money.
Used car salesmen do not butter their bread by losing money on sales. That's not a thing at all.)
I don't know the details of the US programme, but London's recent successful scrappage scheme had a limit of £2000 for cars/vans and £1000 for motorcycles [1].
Only "dirty" vehicles that do not meet modern emissions standards qualified. And it only makes sense to scrap your vehicle if it's worth less than the £2000 payment you'd get by scrapping it. So nobody is scrapping modern, good quality vehicles: you'd just sell it instead and get more money.
People still needed cars, and everything is relative. When used car prices go up relative to that of new cars, then new cars become relatively inexpensive.
This helps sell more new cars. And back in the time of "too big to fail" auto industry bailouts, selling more new cars was kind of important.
edit: And remember, there were restrictions for Cash for Clunkers. The car had to be less than 25 years old, it had to run, and it had to have been registered and insured for the last 12 months. It was deliberately designed to thin the pool of functional used vehicles.
This program claimed revered cars like Audi Quattros and BMW E30s...along with V8 Mustangs. And once turned in, they were all quite purposefully destroyed: Sodium silicate replaced the engine oil and they were run at WOT until they seized, and then they were crushed just to be sure.