Used Honda Civic Michigan

On 1 July 2009, started the reimbursement of car allocation model (CARS) or officially scrapped. The aim of the program is twofold: to help stimulate the economy and the number of vehicles on the road with minimum fuel consumption. The program ended 24th August 2009, was assigned as the $ 3 billion to the Office exhausted.

Consumers have received a voucher for $ 3500 or $ 4500 for the marketing of an old car to buy a new vehicle. If the new vehicle has a combined fuel economy of at least 4 but less than 10 miles per gallon (mpg) than the vehicle was traded, the credit-$ 3,500. If the new vehicle has a combined consumption of 10 + miles per gallon more than the vehicle was traded. Credit was $ 4,500.

Judge in reviewing the results of the first row of the scrapping of a success. The program was sold in almost 700,000 transactions distributors and fuel efficiency of vehicles in the period of 15.9 miles per gallon, while the energy efficiency of the vehicles was 24.9 miles per gallon purchased. But scrapping is an excellent example of the law of unintended consequences, because there were side impacts must be addressed before the program a success can be excluded

* Cash for Clunkers increased sales, which were done in the near future by a couple of months. A study by Edmunds.com, only 125 000 690 000 purchases would be without the incentives, or in other words have been possible had occurred more than 80% of the purchases, even if have not had to scrap the $ 3,500 and given $ 4,500 vouchers. Two economists from the University of Delaware have ruled that the program exceeded a net cost of $ 2,000 per transaction and the total cost of the vehicle had the benefits of 1.4 billion dollars.

* The program for the supply of vehicles to reduce at low cost. By forcing all vehicles sold in the cost of delivery vehicles available to lower and middle class families have been destroyed significantly reduced. This reduction in supply in turn led to a rise in prices for comparable vehicles are available for sale, forcing families to spend more cars.

* The Japanese and Korean automakers gained market share, the Big Three (General Motors, Ford and Chrysler). Toyota accounted for almost 20% of total sales, while Honda accounted for 13% of the total turnover has. Seven of the 10 models were sold foreign cars or trucks for the Ford Focus, Chevrolet Silverado, Ford F-150 models, which are produced by U.S. automakers in the top 10. The top three cars were bought, the Toyota Corolla, Honda Civic and Toyota Camry.

* The fuel economy gains were not as large as expected... A study by the University of Michigan found the program the average fuel economy of vehicles by 0.7 miles per gallon purchased in August 2009 has improved slightly more than 3%. What is also important to note, that if something is cheaper (in this case, the gas in the form of improved mileage) of a consumer is more and more of the same, offsetting gains in fuel economy.

* The destruction of the engines pots "reduces the availability of spare parts, which they are more expensive. Typically, the engine of the vehicle to the most valuable car-grade, but the rescue facilities and scrap the sale of the power train components of vehicles prohibited scrapped.

Cash for Clunkers program proved the axiom that if you is someone money for something that purchase anyway, give it the object before buying. The program also offers a concrete example of the fallacy of the broken window and the consumers pay for their vehicles destroyed fully functional. The money that consumers spent on new vehicles could be potentially advantageous spent on other purchases.