September 1, 2010 story from Edmunds.com - here
"Prices of used cars jumped 10.3 percent overall in July
from a year earlier, or by $1,800 on average, according
My favorite law in action- here
"Why are used-car prices rocketing?"
".....part of the answer is that the supply of used cars is
artificially low, because your Uncle Sam decided last year
to destroy hundreds of thousands of perfectly good
automobiles as part of its hare-brained Car Allowance
Rebate System — or, as most of us called it, Cash for
Clunkers. That was the program under which the
government paid consumers up to $4,500 when they traded
in an old car and bought a new one with better gas mileage.
The traded-in cars — which had to be in drivable condition
to qualify for the rebate — were then demolished...."
"Congress and the Obama administration trumpeted Cash for
Clunkers as a triumph — the president pronounced it
“successful beyond anybody’s imagination.’’ Which it was, if
you define success as getting people to take “free’’ money to
make a purchase most of them are going to make anyway,
while simultaneously wiping out productive assets that could
provide value to many other consumers for years to come. By
any rational standard, however, this program was sheer
"No great insight was needed to realize that Cash for Clunkers
would work a hardship on people unable to afford a new car.
'All this program did for them,' I wrote last August, 'was
guarantee that used cars will become more expensive. Poorer
drivers will be penalized to subsidize new cars for wealthier
drivers.' Alec Gutierrez, a senior analyst for Kelley Blue Book,
predicted that used-car prices would surge by up to 10
percent. “It’s going to drive prices up on some of the most
affordable vehicles we have on the road,’’ he told USA Today.
In short, Washington spent nearly $3 billion to raise the price
of mobility for drivers on a budget......."