Cash for Clunkers (aka CARS): Success vs. Hype‎

Well over the last few months the car market has had it great, $3 billion in government incentives to drivers who scrap their old car in exchange for a more fuel efficient new car, but one does get the feeling that maybe this has led the car industry into a false sense of security, to which they may now find the rest of the year and indeed next year quite a strain.

According to the BusinessWeek website the whole scheme has been more hype than success. Apparently the whole scheme has contributed to the sales of 690,000 cars, and while this sounds a lot, it only actually amounts to less than a 3% boost for the entire year. According to Edmunds.com the purchase intent is now down 11% which will most likely cause a slump in sales over the coming months. It seems all the scheme has really done is fast tracked the people who were already considering purchasing before the scheme came into effect, and maybe just caught the eyes of a few opportunists, and thanks to Ying and Yang, balance and all those sayings like “Every Action has an equal and opposite reaction”, we can expect quick sales for a few months thanks to the clunkers scheme, and then a few slow months to balance out the quick months. The scheme was a fantastic idea, but possibly not thought through for long enough.

Until the government releases all the official statistics from the scheme, and the sales for the period after the scheme had finished, I guess it will all be personal opinion on whether or not the Cash for Clunkers scheme was a success or just hype. What did you think of the scheme, was it a success? Or was it just hype? Let us know here at Product Reviews!

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