Obama administration's 2009 vehicle destruction program linked to used car scarcity

The 2009 Cash for Clunkers program, established under the Consumer Assistance to Recycle and Save Act signed by Barack Obama, resulted in the destruction of nearly 680,000 functioning vehicles. The $2.85 billion initiative provided motorists with $3,500 or $4,500 toward fuel-efficient vehicles in exchange for surrendering older cars and trucks.

While the program aimed to boost automobile sales during the Great Recession, it permanently removed drivable vehicles from the market that could have served as affordable transportation. Approximately 85% of the surrendered vehicles were trucks, SUVs, or light trucks, many of which were operational at the time of entry. To comply with the program, dealerships were required to disable engines before sending vehicles to be crushed or shredded.

This historical removal of inventory coincides with current challenges in the used-vehicle market. According to Cox Automotive, cars priced below $15,000 accounted for only 15.7% of used-vehicle dealership inventory in September, a decrease from 19.4% the previous year. The average used-vehicle listing price reached $27,235 in September, the highest level since December 2022.