Cash4Clunker Hangover

Edmunds estimates that car sales will hit a 28 year low this month. C4C drove the only year-over-year monthly increase in auto sales since 2007, and appears to simply have drawn demand forward. Now sales fall faster. The WSJ also reports that Cadillac sales are slow due to a lack of a leasing program. The SeekingAlpha report speculates that a similar fate is about to befall housing as the $8K tax credit has expired along with other mortgage-backed securities subsidies. 

We are coming out of Peak Stimulus, and the downslope puts the real economy at risk of backsliding absent more gimmicks like C4C. Can the economy revitalize with government gimmicks? You think a free market would act this way? No, only the 'sophisticated' imagination of central planners can come up with policy clunkers like this. No, only the 'sophisticated' imagination of central planners can come up with policy clunkers like this. 

Comments

[psycho_puppies]

Not only will C4C put auto sales at at 28 year low but now all of a sudden many people who did not have a car payment now do. I’m not sure what the average car payment is but it will be that much less spent on other things.

[Mamma Boom Boom]

psycho,

The average payment resulting fron C4C is $500/month. Buyers remorse is prevalent.

[New ewaver]

I dont regret trading my clunker and you missed yourchance!

[Brian]

Don't worry! A bigger rebate for home-buyers may be in the works...

Sen. Johnny Isakson, Republican from Georgia, was the congressman who initially introduced the credit to Congress. He had initially proposed that the amount be $15,000 which is what he is calling for now.

http://www.goodfinancialcents.com/first-time-homebuyer-tax-credit-could-be-extended/

[psycho_puppies]

New Ewaver,

You may be pleased with your purchase but they typical person who took advantage of the program will now have much less ($500.00 / month) discretionary income. In our consumer-based economy this will have consequences. Enjoy your new ride.

[Mamma Boom Boom]

Chit, New ewaver, you couldn't make a down payment on a ham sandwich.

[New ewaver]

I am enjoying it and im not a doom and gloomer and happen to think the economy will improve. Do i sense sour grapes?

[New ewaver]

I do fine. But thanks for caring somuch about me Angry Ned.

[Rob]

New ewaver:

What kind of car did you dispose of and how many miles did it have on it? Was it in good mechanical condition?

What is the payment per month on your new car?

[New ewaver]

It was a bts 4runner w 220k

new car a crv

no financing

[Mamma Boom Boom]

Hmmmm! Angry Ned?

But I do care about you. It's just that it's such a small amount that it can't be measured.

[psycho_puppies]

New Ewaver,

"Do i sense sour grapes?"

I did not miss my chance. I buy couple year old low mileage autos for cash. I have bought new before but new car smell is not worth the immediate 25-30% depreciation to me. I do believe a tax payor subsidized auto purchase for you will do more harm then good for the overall economy, and have stated why.

" happen to think the economy will improve."

Based on what?

[new Ewaver]

I really like the new car warranty, smell, etc. Not sure if my purchase good/bad for economy but it's good for me. No remorse, still having fun.

Second question ...Based on my belief that there are still many gamblers like Ned Busong pumping money into the of the financial sector exactly when the latter needs it. This thing may crash but I think it has a ways to go. Too much cockiness still from the bear camp

[Mamma Boom Boom]

new Ewaver, are you Sherman McCoy in an iridescent green jump suit?

[min]

Easy guys he did say he was a "new" Ewaver. Let's not devirginize him too forcefully he'll get his initiation soon enough...

While he unremorsefully enjoys his new ride of course.