Cash for Clunkers is Worse Than You Think

The Cash for Clunkers program (CFC) which gives you $4,500 to turn in your old working car to buy a brand new working car is actually more expensive than you think.

To start with the US Government owns a big portion of GM and Chrysler so it would seem like a good idea to stimulate sales of GM and Chrysler cars. The problem arises with the fact that in the CFC program you can buy a car from anybody. Of the 222,000 CFC participants from last week I assume a good percentage bought new cars from Asian or European car companies. So the actual cost to the US taxpayers of helping the US owned car companies would be more like $6,000 to $9,000 per US car.

Jeff Carlson

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