As has been noted numerous times on LRC/LRC blog, the unintended consequence of the gunvernment’s “Cash for Clunkers” program will be that inexpensive used cars that could have been bought by people who couldn’t afford a new car—or who could afford one but just weren’t interested in buying a new car (i.e., just wanted to save money by buying a cheaper used car)—are now being destroyed.

Well, lo and behold, forceably reducing the supply of used cars while the demand for used cars has actually grown (because of the gunvernment-created recession) will probably also have the unintended consequence of driving up the cost of used cars. Duh.

Here’s a quote from a USA TODAY article:

Now, the clunker program could cause prices to rise 5% to 10% more,* especially for vehicles worth $4,500 or less, says Alec Gutierrez, senior market analyst for Kelley Blue Book. “It’s going to drive prices up of some of the most affordable vehicles we have on the road.”

Higher prices—that should really “help” people who are struggling to make ends meet. Here’s something to pass on to our “caring, compassionate” members of Congress who voted for this clunker of a program.
_____________________________
*This already takes into account that used car prices are already rising because of the recession—economizing people are preferring to buy used cars rather than new cars.