Tuesday, September 15, 2009

Last Month Cash for Clunkers, This Month no Civics for Cash

My dad forwarded me this article from the Columbus Dispatch about the aftermath of Cash for Clunkers around Central, Ohio.

The good news is that cash for clunkers led to huge increases in sales, which is what it was supposed to do. The bad? news is that as one dealer says in the article they don't have any cars left to sell, in his case the dealership's inventory fell from 200 to less than 10 cars

But I'm not sure this is bad. The point of the program was to increase the production of cars. Car makers are not going to start making cars until the dealers need more cars, which won't happen until they sell the old ones.

The key question is did the program get people to buy cars who would not have purchased cars without the program in the next year or so, or was the increase just due to people changing the timing of their purchase.

That is the more difficult analysis and it remains to be seen.

Bookmark and Share

No comments: