Cash for Clunkers for Whom?

An interesting study by cars.com showing the results of the Cash for Clunkers program by buyers was published in Auto Remarketing Today. The program payouts are winding up now, with the government approving and/or paying out for 589,040 sales to the tune of $2.482 Billion. (and yes, the government is catching up as $2.157 Billion has actually been paid out) Interestingly enough, the program was very successful in sales to folks under 34 years old, that were not in the market for a car, but felt that the offer was simply too good to pass up. Of the under 34 year olds that purchased, 30% were NOT in the market for a vehicle. So if the analysts claim was that the program would move a lot of buyers into the purchase funnel that really did need a vehicle, but were holding off until the economy turned around, does that mean that the program worked better than expected? Or is there still some pent up demand?

My thoughts lean to the latter. Walking through the lots of dealers from Laurel, Montana to Denver, CO, one thing was hugely apparent at the end of the program. There were simply no vehicles left. All the lots were parking their vehicles at an angle for the appearance of a more full lot. Visiting with an Internet manager in a Chrysler dealer in Centennial, CO near the end of the program, they claimed, not only had they sold out their own lot, but all the closing CJD stores inventories were depleted as well. This was a couple of weeks BEFORE the end of the program. That tells me that there were a lot of people still in the market for a vehicle, there just wasn’t enough inventory to meet the demand. Dealers, who could, were not going to run out and order 2009 models, when the ‘10s were just weeks away. Therefore, I project a strong close out to the year. Much more of the pent up demand will be met, with dealers continuing to push vehicles as the 2010s trickle onto the lots. Good news for EVERYONE out there (this means you, indy lots) these used car trade ins won’t have to be crushed.