Do you feel that the government’s cash for clunkers program a success? Many people have speculated their thoughts on the success and failure of the governments efforts in jump starting the auto industry. Nearly 1000 Laid-Off GM workers were called back to the production lines as many people took advantage of the government’s $3500/$4500 in rebates given towards the purchase of a new car in the event of a clunker trade-in.  On the flip side, dealers are to eat the rebate costs until the government pays them back.

Larger dealerships may reap the benefits of this program, creating a large influx of new car sales and sitting on a mountain of deemed junkers valued between $3500 to $4500 a piece! Multiply that by 50 or even 200 cars and you have a large amount owed to each dealership! What about the smaller dealerships? Smaller dealerships may feel the wrath with the possibility of pushing them into bankruptcy, especially if the government doesn’t pay on time. Over $3 billion dollars has been put into this program. Whats next?

Used car dealerships are watching their potential inventory being gutted and charities have seen a 12% decrease in donations, according to The Atlantic Business Journal. Are we robbing Peter to pay Paul? Some speculate, Yes; which will bring the economy in a downward spiral. Is destroying working capital in used cars to generate jobs worth it the effort? It is too soon to say. but only the future will tell.