Will we see another Cash for Clunkers Program in 2020? The talk of such a program has already started. This past week, Barron’s posted an article entitled “Get Ready for Mega Cash for Clunkers” written by Morgan Stanley’s Adam Jonas. According to Jonas:
“We expect a cash for clunkers program to be much larger in scope and longer in duration than what we saw. In 2008 and 2009, we saw a $3 billion package that stimulated about $14 billion of purchases. This time around we’re expecting about $10 billion of stimulus that drives $50 billion of purchases and adds about four million of SAAR [seasonally adjusted annualized rate, a measure of car purchases] over a six-month period beginning in the fall and then into early 2021.”
While the program may sound like a good idea for the automotive industry, the economic benefits this time around would be harder to justify. There are many industries that have been hit hard, especially the restaurant industry, so will the auto industry get singled out for a special program this time around? Only time will tell. In any case, we will be covering all the current incentives, rebates, and program OEMs and the government announces over the coming weeks and months.
Back in 2008, PCG Digital created the #1 non government website to educate consumers on all the details pertaining to the Cash For Clunkers Program. The official name of the government program was CARS which stood for Car Allowance Rebate System. The government set aside 3 Billion dollars to encourage consumers to trade in older vehicle for scrappage in exchange for monies towards a new vehicle.
The rollout of the Cash for Clunkers Program was chaotic. Dealers were unsure of the program rules and concern that they would not be repaid by the government. The disorganization is very much like the current Payroll Protection Program (PPP) as banks were unprepared to handle the government program resulting is angry complaints from small business owners. It would be our hope that if a 2020 Cash for Clunkers Program was announced, that the government would call in dealers, NADA executives, and OEM leaders to make a better plan of action.