The COVID-19 pandemic has basically brought most of the world to halt. Orders to stay at home, businesses either having workers to their work from home or closing down, and unemployment skyrocketing is causing the economy to crater. There are efforts to try and jump-start the economy such as $1,200 stimulus checks. But an executive at Ford wants to see a return of a "cash for clunkers" like program.
“We think some level of stimulus somewhere on the other side of this would help not only the auto industry and our dealers, which are a huge part of our overall economy, but will help the customers as well,” said Mark LaNeve, Ford’s vice president of U.S. marketing, sales and service to Bloomberg.
“Cash for clunkers was very effective at that time. It would be nice to think we could have something equally as effective for 2020 when we get out of this because it was a great program.”
According to LaNeve, internal discussions are taking place at Ford about doing a similar program and there are plans to bring the Government in to these talks.
When asked by Automotive News about this, Ford spokeswoman Rachel McCleery said, "The auto industry is America’s economic engine.We are encouraging Congress to look at a variety of ways to drive job creation, increase demand, support customers and provide long-term stability for the entire auto ecosystem."
A brief refresher on the Cash for Clunkers program. In 2009, the U.S. Government introduced a billion initiative called the Car Allowance Rebate System, which gave a voucher worth between $2,900 and $4,500 to anyone replacing a vehicle newer than 1984. Their old vehicle would be taken away and disposed of. The program was nicknamed Cash for Clunkers.
On the surface, the program was a success. Within first month, all of the funds were exhausted. This prompted the U.S. congress infuse an addition two billion into the program, which would be all gone within 17 days. But begin to look deeper and the results are mixed. In 2012, a study published in the Quarterly Journal of Economics described the program as being a bit of a wash,
"...the effect of the program on auto purchases is almost completely reversed by as early as March 2010 — only seven months after the program ended.”
Other studies have come to the same conclusion.
There's also the question of how many perfectly good used cars were taken off the road due to the program.
Source: Bloomberg via Automotive News (Subscription Required), The Drive, The Truth About Cars
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