Status of the Clunker plan
By Peter Boockvar - August 18th, 2009, 1:41PM
According to Edmunds.com (the auto consumer info website), “the rush of automotive sales activity brought on by the ‘Cash for Clunkers’ program is fading fast. They said auto purchase intent is down 31% from its peak in late July. “Now that there is plenty of money in the program and the most eager shoppers have already participated, the sense of urgency is gone, and the pace of intent decline is accelerating…Inventories are getting lean and prices are climbing, giving consumers reasons to sit back,” according to Edmunds.com CEO. They claim the purchase intent has “proven to be a reliable leading indicator of sales to come in the following 90 days.”
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August 18th, 2009 at 6:11 pm
We did it in Italy (by center left governments). It near destroyed the FIAT (our car producer).
Simply the buyers bought at discount in a short time what they would buy in a longer time, then the purchases tanked. Instead of a continuous stream there were spikes and downturns of car sold.
August 19th, 2009 at 12:35 am
Plus, can the people who rushed in to trade in the car they could afford for one they couldn’t? Can you say “subprime” housing crisis? What will happen when car buyers start to default on their car loans?
August 19th, 2009 at 12:38 am
Oops – first sentence should have read: “Plus, what happens to the people who rushed in to trade in the car they could afford, for one they couldn’t?” Sorry – past my bedtime.