On Wednesday, Ed Morrissey at Hot Air posted an article about the impact of Cash for Clunkers on the current used car market.  Because of the number of used cars destroyed as a result of the Cash for Clunkers program, used cars are scarcer and more expensive.

The article cites the impact of the program on some used car prices:

• Cadillac Escalade – 35.6% increase
• Chevy Suburban – +34.2%
• Dodge Grand Caravan – +34%
• BMW X5 – +33%

Generally speaking, people who buy used cars buy them because they are less expensive than new cars.  A quality used car will last almost as long as a new car and be cheaper to buy.  I live in Massachusetts, where the excise tax on a new car is considerably more than the tax on a used car.  I bought a new car in February.  In addition to the sales tax on the car, I paid a personal property tax of over $500.  Had I bought the same car a year old, that cost would have been closer to $200 or $300. 

The article concludes:

“As predicted last year, the people most hurt by the price increases are those who can least afford them.  The used-car market usually attracts people who need transportation on a budget, who cannot afford to buy new.   By destroying a quarter’s worth of trade-ins in three weeks and permanently taking them off the market, the Obama administration has forced an artificial inflation by supply restriction.  Moreover, they did so by subsidizing new-car sales that would have occurred anyway, eating up three billion dollars in taxpayer money.

“In other words, the White House spent $3 billion to make used cars more expensive for working-class families.  Nice work.”

This is another example of government interference in the free market.   When the government gets involved, there are always unintended consequences.