The limits of “Cash for Clunkers”


Many Americans indicate that their timeframe for purchasing a new vehicle would not change if the “Cash for Clunkers” program pending in Congress is enacted. But that’s because they don’t currently own a gas-guzzler. Those that do may jump into the market.

At issue is a proposal before Congress to allow cars that meet a set of requirements along a sliding fuel hog scale to be traded in for a new car, meeting requirements on a sliding fuel efficiency scale. The payout to qualifying car buyers could be as much as $4.5K. Details are here:

A survey conducted by Kelley Blue Book finds the 38% of respondents would not take advantage of the offer for a very simple reason – they do not currently own a clunker with deplorable enough gas mileage to participate.

However, 13% do have such a vehicle and would be encouraged to take the plunge into the new automobile market, and another 26% would be inclined to look seriously at the offer.

Blue Book’s Jack R. Nerad noted that many consumers would not be interested or able to participate. “But since more than 10 percent say the program will motivate them to buy a new car sooner, it may result in an increase in new-car sales, and that could do nothing but help an industry in need of some upward impetus.”

RBR/TVBR observation: If this plan ever makes in into reality, it would give automobile manufacturers and dealers something to fight over – motivated buyers, and they would be well advised to take advantage of what broadcasters have to offer when they set to making their case.