Cash for Clunkers Work

Well in reality, all the program did was encourage those folks already planning on buying a new car, to purchase it a little sooner, in order to get the benefit of the stimulus plan. People not planning to buy a car in the first place, simply didn't!

Before “Cash for Clunkers” was enacted, car sales were at a low 9.7 million annual rate.

Then from July 1 to Aug. 24, the time period when the program was in place, auto sales spiked to more than 14 million.

But look at this -- once September came and Cash for Clunkers was no more, car sales plunged 35% - right back to where they were before the stimulus was enacted.

Now it's true auto sales have trended higher since then, but they were already trending up before cash for clunkers and likely would have continued to do so despite the program.

but it looks like things are only going to get worse for the auto industry.

According to the consumer confidence survey just released for June, only about one percent of consumers said they plan to buy a car within the next six months.

That is the lowest level ever since the board began collecting data in 1968

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