Jul 01 2009
Trading on the Clunkers Program?
Today is officially the day the Cash for Clunkers program starts, though apparently there are some details still to be sorted out. I was thinking about this program on my way home yesterday as my car could be a candidate given its age, and now it’s mechanical issues.
Part of me thinks I should go for it. After all, my car is definitely not worth $4500, or even $3500. At some point I’m probably going to want to get a new car. My current car isn’t going to increase in value. That’s for sure, so if I think I’m going to want new wheels in the next few years, this program is probably something I should take advantage of while it’s available.
On the flip side, as I noted before, I don’t really drive much. A new car means a payment and more expensive insurance.
Of course there’s maybe a plan C. What if I could sell my car to someone to use it as a trade in? That could actually be a real business opportunity – aquiring used cars and selling them for trade in purposes – if there aren’t restrictions in the legislation which make that impossible.
Actually, it would make for a really interesting dynamic if the weren’t contrary rules. Used car prices would rise as demand for them being traded increases. If those cars were destroyed on the back end, then supply would also shrink to further the price rise along. In theory, clunkers could actually increase in value beyond that of some lower end sectors of the non-clunker used car market.
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