Cash for Clunkers' Impact on the Market

The initial thinking is that the new-car market will get a quick boost in sales from people looking to take advantage of an incentive that would otherwise not be available. But how big is this pool, and is that really how car buyers operate?

“What this program does is essentially shift the demand from used to new; it doesn’t necessarily create new demand where there was none before,” said Cars.com product manager Jonas Moskowitz, who specializes in used-car sales.

Moskowitz suggests that the typical owner of a car worth less than $4,500 might not even qualify for financing on a new car. According to the National Automobile Dealers Association, the average price of a new car is $28,400.

That doesn’t mean, however, that there isn’t a segment of buyers out there with a second or third car that may qualify. Parents may be able to buy a teenager a new Honda Civic with the help of a voucher secured by trading in the old family minivan, for example.

What do you think? This topic has gotten a massive amount of attention here on KickingTires, so we’re inclined to think there are a lot of people out there eyeballing potential deals.

If you’re considering taking advantage of Clash for Clunkers, tell us your story in the comments section below.