Auto Manifesto

August 21, 2009

Cash For Clunkers

No question this was good to get the interest going and boost consumer spending. But that's not all .

Pulling tomorrow's sales forward, which may be disruptive to the auto supply chain by ramping up production, and then having another slow down when the program ends is something that wasn't anticipated. That and the red tape SNAFUs over rushing this through NHTSA without having answered all the questions made the regulation was a pain for the industry.

For example, it should've been defined at the outset whether the rebate to the dealers was subject to income tax or not. The administration of the program was lacking.

Also the $4,500 max rebate was too generous, as evidenced by the massive response. It would've been wiser to have a lower amount and extend the duration of the program.

The bottom line is that it was a good idea, could've been executed better, and may have been overdone.

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