Returned clunkers drive up cost of cars

There’s a least one downside to the Cash for Clunkers program. The cars turned in under the program are required to be scrapped. And that is driving up prices on the used cars that remain available.

There’s a least one downside to the Cash for Clunkers program. The cars turned in under the program are required to be scrapped. And that is driving up prices on the used cars that remain available.

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The Cash for Clunkers program is offering up to 4500 dollars for people to trade in their old cars for new ones. But the program is exacerbating a problem that has been getting worse. Dave McQuistin is sales director at an automall in Langhorne. He says the value of used cars has been creeping up for about six months.

McQuistin: The prices have slowly risen month over month because they are getting more and more scarce. The lease returns are drying up there’s not much in the lease pool. The rental cars, the rental companies were keeping them longer they were putting more mileage on the cars because the plants have been closed down.

McQuistin says there are still some quality used cars around, but expect to pay more and search harder to find a good one. An analyst from car pricing guide Kelly Blue Book says the used car prices could stay high for the next year.