Regardless of whether you took advantage of the Cash for Clunkers program, you car could be impacted by the program. Especially if you need even one of the good used engines.
Many dealers across the country report a strong response to the government’s program; in Fort Pierce, the local Mazda dealership reports selling several new cars because of the program.
That’s creating a shortage for the dealership in terms of new cars. With the traded-in clunkers going straight to the salvage yard, it’s also creating a shortage of used cars, used engines and many other parts clunker owners need.
“It has been overwhelming,” said the Sales Manager at the local Mazda dealer.
She says her team has put in long hours to accommodate the recent rush of car buyers.
While sales have been strong for her Mazda dealership, the dealership doesn’t gain a trade. That’s leaving many car dealerships desperate for used cars.
“I will buy anybody’s vehicle out there right now, that’s how short of cars we are right now,” she proclaimed.
By the numbers, Kelley Blue Book already reports a 1.6% decrease in the supply of used cars, due to the clunkers program. By the time the total $3 billion is doled out, the used car market is expected to shrink by a total of 4.7%, or 750,000 cars.
If you’re looking for a used car, now is the time buy, mainly for two reasons: dwindling supply and cost.
“Now would definitely be the time to take advantage of the prices, because with the new car shortage, that’s going to drive the market up on the used car vehicles because they’re becoming fewer and further in between,” management said.
Prices have gone up on some used models by as much as $2,000 just in the past few weeks. Both the used car price hike – and used car shortage – the used engine shortage and related parts impacts other sectors of the business industry too.
[...] The clunkers traded in during CARS will be destroyed. The old used engines will be seized, and the chassis will be crushed or shredded. Almost 700,00 clunkers that would have either ended up on the used car market, or in a junkyard selling their used engines and other parts to keep other similar cars running are now scrap metal. These effects are already being felt right now as many used-car dealerships are reporting a shortage of used cars available for them to buy and resell, according to this clunker article. [...]