Confirmed: Chrysler Kills "Double Ca$h" for Clunkers Because It Ran Out of Cars

Robert Farago
by Robert Farago

The Wall Street Journal confirms TTAC’s report that Chrysler killed its “Double Ca$h” for clunkers ad campaign because they ran out of popular, qualifying vehicles. “The marketing change comes as Chrysler is struggling with low inventory of its most popular products because of prolonged factory shut-downs and after the success of the government program further depleted stocks at dealerships.” How’s this for a quote? “Unfortunately the problem that we face with Chrysler is the lack of inventory,” ChryCo dealer Bill Rosado told the WSJ. “I can’t believe I’m saying this, I need more Chrysler inventory. My goodness, I’ve got to rehearse that line a couple times.” This gives credibility to Ken Elias’ contention—as yet unreported by the MSM—that Uncle Sam’s entire Cash for Clunkers (a.k.a. C.A.R.S.) program fell afoul of low inventories, rather than limited funds. In other words, the program did not run out of cash. It ran out of cars. Which makes me wonder . . .

Did car-strapped manufacturers call for a halt to the Cash for Clunkers program? The Department of Transportation (D.O.T.) says the C.A.R.S. program was never suspended. But the story that C.A.R.S. was pulled—which led directly to Congressional approval for additional $2 billion in federal funding—came from somewhere . . .

Given previous reports of a “ring ’round” by the Department of Transportation on the day the program was put in limbo, it seems increasingly likely that the D.O.T. and carmakers contemplated putting the brakes on the program to allow the automakers to play catch-up.

If so, the resulting PR spin—it’s too successful!—belies unreported, misdirected collusion between the feds and carmakers. (Or sensible policy, depending on your perspective.) The question then becomes, were all carmakers’ concerns treated equally? Or did the feds weigh their nationalized wards’ (i.e. Chrysler and GM) distress heavily in the equation?

Meanwhile, the WSJ ends by [almost] pointing out that ChryCo really missed the boat here: “ estimates that Chrysler has spent about 68% more on incentives for the first six months of the year than the industry average, at about $4,693 per vehicle.”

The Cash for Clunkers program dramatically increased demand for some of the former bankrupt automaker’s qualifying products. If Chrysler had the vehicles on the lot, they could have reduced those incentives. Big style.

The chances that new Chrysler new inventory will arrive in time to capitalize on that demand, before the next $2 billion runs out (should the Senate roll over) are slim. Unless, as Mark Tapscott has suggested, the C.A.R.S. program is made permanent.

But Cash for Clunkers is about helping the environment, not propping-up a failed automaker. Right?

Robert Farago
Robert Farago

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  • BDB BDB on Aug 03, 2009

    50Merc-- Same at my local Ford dealership. Just two weeks ago the lot was filled with new cars, now it is MUCH emptier.

  • Psarhjinian Psarhjinian on Aug 03, 2009
    I did my own research and almost all of Chrysler’s vehicle qualify. Qualify and are desirable. That cuts the list down some.
  • EBFlex Yawn. It’s still a white refrigerator. A Camry has more soul and passion than this.
  • Jkross22 For as nice as these were at the time, I always preferred the 850, even with wrong wheel drive. Especially the early 90s. In sedan form. The 850R. Mmmmm.
  • FreedMike Well, if you want a Swedish cockroach that's easy to work on, here's your ticket. Tad overpriced but it's an asking price, after all. And those old Volvo seats are divine. It'd be worth a look.
  • SCE to AUX "...has arguably advantaged the Asian nation by subsidizing electric vehicles, it has attempted to prioritize more domestic manufacturing by pouring money atop the relevant industries via the so-called Bipartisan Infrastructure Law and Inflation Reduction Act"Seems like you're trying to diss the Biden Administration before crediting its protectionism in the IRA.Chinese-made EV batteries aren't part of the subsidy program, so subsidizing EVs hasn't advantaged China. But the general sourcing of Chinese-made components - whether in a subsidized car or not - does help China.This is a general problem in the US economy. Everybody wants to wave the flag, but nobody wants to be the high-cost supplier, and nobody wants to pay more.The same scenario played out 50 years ago, except the competitor was Japan. At the end of the day, protectionism didn't work, and consumers got what they wanted.
  • Bkojote I'm so glad I bought a Kia Telluride instead of a Toyota Tacoma given all these recalls. I wanted an off roady looking vehicle so I could impress the secretary we hired but instead my wife left me when she saw my phone messages and now I'm stuck making the $1200 monthly payment until I can refinance at a lower rate than 28% even though I lost my job last month. I'm hoping the Kia dealers will let me trade to the new one with the bigger infotainment tooFunny enough the secretary's new boyfriend is driving a Tacoma but with the recall maybe I'll have a shot.