Another reason to hate Cash For Clunkers: Higher used car prices
But here's yet another reason to hate it; It's making low-priced used cars unavailable, and depriving low- and moderate-income families of badly needed transportation at affordable prices. According to the USA Today, "The popular cash-for-clunkers program, extended by Congress last week with $2 billion more in federal incentives, requires that all the old fuel guzzlers traded in are scrapped - not resold." As many as 750,000 vehicles will never make it to the used car lot, many of which would had still had years of life left in them.
Because trashing a clunker can now yield benefits of as much as $4,500, perfectly usable beaters that once made a great alternative to wasteful car loans are now being scrapped in a pathetic and short-sighted effort to prop up the already bailed out automobile industry.How much of an impact is this having? Mike Williams, owner of Auto Wise in Shelbyville, Kentucky told the USA Today that "The $3,000-to-$5,000 car is just gone."
Cash For Clunkers is supposed to good for America, but what it's really doing is forcing people to take out car loans when every single personal finance expert on the planet will tell you that borrowing money to buy a car is a sure way to end up broke.
Cash For Clunkers is robbing the people who can least afford it -- and enabling middle-class people to trade in perfectly useful cars for car loans instead of saving for retirement.