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Why have cars become so expensive?

My understanding is that the used car market was gutted by "cash for clunkers" style government programs

Used to be more used cars on lots, so used cars were more affordable

May not be the whole story but it seems likely it played a part

Very true, but you're a decade or two late for that. IIRC Cash4Clunkers put like a $3k floor on used car value (~$5-7k in today's dollars) meaning you'd never sell your old car for $2k to an individual when you could sell it to the government for $3k.

Per google it was started in 2009, which means any car worth less than $5k around 17 years ago isn't materially impacting new or used car prices today.

Huh

I could have sworn the cash for clunkers thing was much more recent. Thank you for the correction

It was like 700,000 vehicles. Enough to have an impact, but we buy like 15 million cars a year, it's gonna smooth out fairly quickly.

This just isn’t true. Offering someone $1k to junk a $5k car does nothing. The only time it matters is when a $2k car needs more than $1k of repair like a transmission replacement. The program kept the most problematic cars off the road generally increasing the reliability of everything on the market. The used car market is alive and well.

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