Cash for Clunkers seemed like a good idea at the time. The influx of new car buyers gave the auto companies a glimmer of hope for the upcoming 2010 auto sales year and a chance to get rid of their stagnate stock. Unfortunately, it also gave people who could not afford a new car the chance to buy a new car. One week into the program all the funding had been spent which prompted Congress to authorize an extra two billion dollars on top of the original one billion.

Consumers who purchased a vehicle under the government’s Cash For Clunkers program are now struggling to make the loan payments, with some cars getting repossessed. Those who used the clunkers program had a repo rate over double those who didn’t use the government incentives. Almost 1 in 5 clunkers program participants who took part in a survey this month said they regret buying a new vehicle under the program. Faced with a new monthly payments many of the clunkers program users admit they didn’t think past the new car smell.