Are Automakers Receiving Too Much Help Fom the Government?

The recent Cash for Clunkers program has put a huge smile on automakers faces. So many automakers across America have received several benefits from the Cash for Clunkers program. There have been reports of dealerships running out of cars, closing early because of no inventory, and a big increase in car sales. The high volume of sales has resulted in automakers asking the government to extend the Cash for Clunkers program and add an extra $2 billion. This may have people who disagree with the Cash for Clunkers program wondering if automakers should be receiving more help from the government.

The idea for the Cash for Clunkers program originally came from Germany. The U.S. government and automakers in America saw how successful the Cash for Clunkers was in Germany and wanted to have the same type of program in the U.S.

Bringing the Cash for Clunkers program to the U.S. seemed like a great idea for automakers in America. But two of the big three American automakers had just received bailout money from the government. Therefore, adding the Cash for Clunkers program was beginning to make automakers in America look very greedy.

Despite the huge stimulus package and large amount of bailout money for automakers, the U.S. government decided the Cash for Clunkers program would be a great idea for Americans and more importantly auto dealers across the U.S.

As predicated the Cash for Clunkers was a huge success in the U.S. The program was so popular that it caused prices for new cars to increase and quickly reduced the inventory of cars at dealerships. The increase in sales at dealerships across America caused automakers to quickly ask the government to extend the Cash for Clunkers program and add more money.

But the negative impacts of the Cash for Clunkers program made extending the program and adding more money look like a bad idea. A few of the negative impacts that have resulted from the program are good cars being destroyed, some customers are paying more for their new car, and a potential increase in U.S. debt.

The automakers dependence on the government and the Cash for Clunkers program has shown Americans that automakers are not capable of coming up with their own creative ideas that will help them to increase their profits.

If Americans continue to lose their jobs and the economy continues to slowly recover, the industry that will benefit the most from the Cash for Clunkers program is the repo industry.