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Here is another unintended consequence of Cash for Clunkers.  Remove supply (of old cars) and prices will rise.  Especially when the demand of old cars is rising.  Cash strapped car buyers that can’t finance a new car, buy used.  So yes, used car prices would have risen with the increase in demand, but the rise in prices has been exasperated by the shrinking supply.

Here is another unintended consequence of Cash for Clunkers.  Remove supply (of old cars) and prices will rise.  Especially when the demand of old cars is rising.  Cash strapped car buyers that can’t finance a new car, buy used.  So yes, used car prices would have risen with the increase in demand, but the rise in prices has been exasperated by the shrinking supply.

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