We’ve written numerous times about the Cash for Clunkers program and how it stole demand from future sales, how it artificially increased used-car prices, and how it wasted taxpayer dollars by the billions in unnecessary subsidies while doing nothing for long-term sales. Until now, most have assumed that at least the buyers wound up with good deals and taxpayer-financed satisfaction. The Orange County Register reports that the program recipients may not be as satisfied as people would assume:
Thousands of people who leased cars last year as part of the Cash for Clunkers program are having second thoughts and are trying to get out of their leases, reports LeaseTrader.com. …
“I think it’s Cash for Clunkers remorse,” Sternal says, whose company helps hook up people who want to trade out of their leases with those looking for a lease.
For some, the burden of a long lease has them looking to escape. But it’s not so much the lease as it is the car that lessees bought. Recall that the C4C program required buyers to trade certain classes of gas-guzzlers for more environmentally friendly vehicles. At the time, those cars looked attractive, but a year later, the thrill is definitely gone:
“They woke up last year and saw the Cash for Clunkers program and thought they they could help the environment and the bunnies and the trees and got smaller, environmentally-friendly cars,” Sternal says. “Now they look at that car and think about the really nice car they used to have and think ‘I want something roomier, more luxurious. This contract is bad and I’m not in love.'”
Sternal says the company started getting calls about trading Cash for Clunkers leases in May and now is getting “several hundred” calls a week.
LeaseTrader.com they are getting the most inquiries about Cash for Clunker lease trades from people with Toyota Camrys, Ford Escapes and Honda Accords.
I’m not terribly sympathetic to their plight. The C4C program was a massive waste of money and material, but no one forced people into those choices, either. The Camry and Accord are two perennially popular models, and by all accounts well-built for their class. These lessees rushed to take taxpayer money to fund their new purchases, and should have thought twice about the investment.
Still, this is what happens when the government attempts social engineering in consumer markets. It’s expensive, it creates long-term dissatisfaction, and disrupts commerce.
Update: From commenter Batterup, edited for clarity:
The partakers of C4C weren’t thinking of the bunnies; they were thinking “I am going to get something for free!” Now that they have had the fun of monthly payments on some piece of crap they didn’t want in the first place, they’re upset. Maybe this little experiment will turn some of these children into adults.
One can only hope.