Americans are now nearly $2 trillion in the hole on car loans.
Economists just traced a major piece of that crisis straight back to Barack Obama.
What he ordered done to 680,000 perfectly working vehicles is a story Washington hoped you would forget.
The Cash for Clunkers Program Obama Sold as a Win for Working Americans
In 2009, Barack Obama signed the Consumer Assistance to Recycle and Save Act and launched what the media celebrated as "Cash for Clunkers."
Americans could get up to $4,500 toward a new vehicle – as long as they surrendered a working truck, SUV, or car for immediate destruction.
Federal law required every dealership to kill the engine before the vehicle left the lot – each one sent directly to a crusher or shredder, not recycled, not donated, not resold to a family who needed cheap transportation.
Destroyed.
Approximately 85% of those surrendered vehicles were trucks and SUVs – many still fully operational when they arrived.
The program also banned the resale of engines and assembled drivetrains – the parts salvage industry representatives told the GAO typically represent 60% to 65% of what a scrapped vehicle is worth.
The Specialty Equipment Market Association sounded the alarm: the program was wiping out the parts supply that auto restorers, repair shops, and hobbyists had counted on for decades.
Obama's team waved it off.
Why Cash for Clunkers Was a $2.85 Billion Economic Disaster
Economists Atif Mian and Amir Sufi tracked vehicle sales in 957 U.S. cities after Cash for Clunkers ended.
The program generated approximately 360,000 additional car purchases in July and August 2009 – and almost all of those were reversed within seven months.
Every city that saw a Cash for Clunkers spike saw a matching sales collapse once the money ran out.
The Cato Institute said the program had "no long run effect on auto purchases."
Edmunds.com ran their own numbers and found that 565,000 of the 690,000 vehicles sold through the program would have been purchased anyway – program or not.
Obama spent $2.85 billion to move car sales forward by a few months, destroyed 680,000 working vehicles in the process, and called it economic stimulus.
Used Car Prices Are Still Climbing Because of What Obama Did in 2009
Cox Automotive's September data shows that only 15.7% of used vehicles on dealer lots are priced below $15,000 – down from 19.4% a year earlier, even as the overall used-car market grew.
The average used car on a dealer lot is now listed at $27,235 – a price last seen in December 2022.
Monthly payments average $542 on used vehicles and $765 on new ones.
Outstanding American auto debt just reached $1.713 trillion, and delinquency rates on those loans are rising.
Obama's environmental program – cleaner fuel economy, a boost for Detroit, a win for the climate – left working-class Americans with fewer affordable cars to buy, a gutted parts market, and a used-car landscape that has permanently repriced itself out of reach.
The Economics Obama Never Understood
Economists have a name for what Obama pulled: the broken window fallacy.
Break something, watch money flow toward fixing it, then claim you created economic activity – Washington has been running that con for generations.
Obama's team saw the short-term car sales spike and declared victory.
Nobody counted what was lost permanently – the working family who needed a $5,000 truck that got crushed instead of resold, the repair shop that lost its parts inventory, the first-time buyer priced out of a market Obama deliberately depleted.
Economists call that "the unseen" – the economic activity that never happened because the government destroyed the supply.
The Cato Institute said it directly: "The supply of used cars decreased. The result is that prices of used cars increased, which has hurt low-income families."
That was published in 2010 – and the only thing that's changed since is the bill got bigger.
This is what happens every time Washington decides it knows better than the market – it destroys things working Americans depend on, hands the money to politically favored industries, and calls it progress.
Obama crushed 680,000 working cars, spent $2.85 billion of your money, and drove away.
Working Americans are the ones still making the monthly payments.
Sources:
- Jack McGeever, "Obama Admin Paid Americans To Scrap 680,000 Cars," The Daily Caller, October 20, 2026.
- Cato Institute, "Cash 4 Clunkers Fails Again," Cato.org, September 14, 2010.
- Atif Mian and Amir Sufi, "Cash for Clunkers Had Modest and Short-Lived Effects," NBER Digest, February 2011.
- Edmunds.com, Cash for Clunkers economic impact analysis, October 28, 2009.
- Cox Automotive, used vehicle market report, September 2026.