Category: News 2

There’s one law politicians always choose to ignore. Unfortunately, it’s the immutable Law of Unintended Consequences.

It was sitting out there screaming, “Look at me,” when Congress passed the Cash-for-Clunkers program, but no one in Washington, DC paid any attention to its plaintive wails.

So now we all get to live with the unintended consequences of this unmitigated disaster on wheels.

The following list probably doesn’t include all the problems C4C will cause – for the fact is that all the unintended consequences may not be known for years – but it’s a pretty good jumping off point.

1. You think it’s hard to find a good, honest mechanic now? Fewer clunkers on the road means fewer clunkers being repaired. Repair shops that specialize in older cars will really feel the pinch and many will undoubtedly go out of business.

2. Brother can you spare a muffler? Spare parts will cost more. Cash-for-Clunkers regulations dictate that any spare parts must be scavenged from the clunkers within 180 days. After that, all remaining parts – no matter how valuable – must be shredded. The Law of Supply and Demand dictates that scarcity of spare parts will lead directly to more expensive spare parts. Collision repair shops that depend on buying useable doors, hoods, and other body parts from salvage yards will undoubtedly see price increases.

3. Inflate to $4,500. Older cars will cost more, pricing them beyond the means of the poor who need them most. Since the Cash-for-Clunkers law requires that all trade-ins must be destroyed, the program has taken 690,114 (and counting) vehicles off the used-car market. A contracting supply will lead directly to price the smaller pool of remaining used vehicles. Unfortunately, that means the low-income people most likely to buy clunkers will not be able to afford them.

Continue reading “13 unintended consequences of Cash-For-Clunkers”