Used Car Prices Soar
... blame Cash for Clunkers
by Mike Ivey - September 9th, 2010 - The Capital Times
A year ago, new car sales got a boost from the federal government's "Cash for Clunkers" program.
Now, with the incentive expired, the auto industry is reporting a new phenomenon: a shortage of older model used cars.
Under the 2009 program, buyers got $4,500 toward the purchase of new, more energy-efficient vehicles in exchange for their existing vehicle. The used cars were then demolished, which critics say has drastically cut the supply of decent pre-owned vehicles.
"What they did was basically take a million cars out of the market," says Patrick Rogalla, sales manager at Schoepp Motors in Middleton.
The average price for a used car in the U.S. has jumped 10.3 percent in the past year, according to auto industry analyst Edmunds.com. The average price for some used SUVs has skyrocketed 30 percent, the company reports.
Once again America is damaged by the unintended consequences of a misguided Democrat program to help the 'little people'. A million people got tax incentives to buy a new car last year, with the majority of them being high income earners. However millions of true 'little people' are now being screwed by the result. They are paying from 10 to 30 percent more for a used car than they would otherwise have paid. The number screwed by the price increases vastly exceeds the number who got the tax break. That doesn't even count all the people who paid for the tax incentives which wound up in the pockets of the wealthy by having to pay more in taxes to begin with.
The famous science fiction writer Robert Heinlein warned us of this with his "Russian" word TANSTAAFL. "There ain't no such thing as a free lunch." Democrats simply will not accept this idea. As long as they can con people into making the middle class pay their taxes (under the pretense they are the rich), the poor can suck at the public trough forever. They know it. If you are a taxpayer they have only one response. "Shut up." That is the same response they give to those complaining about the higher used car prices they caused.