For the three or four people I know who have taken advantage of the Cash for Clunkers program, the euphoria of dumping an old car while buying a brand new ride has been tempered by the sobering reality they now signed up for a monthly car payment. None of them regret making the deal, but they certainly aren't excited about now having to shell out $300-$500 a month for an auto loan. When one friend started complaining about having a car payment again, I chuckled and thought, "Yeah, that usually goes hand in hand with buying a new car."
I bring this up because a new survey of Cash for Clunker participants by CNW Research found a higher than normal percentage of buyers "...have some or serious doubts they should have made the new-vehicle acquisition." To be exact, CNW says 17 percent of 1000 people surveyed are now showing buyer remorse, compared to an average of 6-8% in a non-clunker environment. According to CNW, the reality of having to pay $275-$350 every month has some clunker participants worried about the impact on their monthly budgets.
This shouldn't come as a surprise since the program targeted people driving old gas guzzlers. There's a reason some of those people drove those cars: they either didn't want or couldn't afford a monthly car payment. That's not a knock on those driving older cars, it's simply reality. For many people, keeping the old car running fit the budget even if it wasn't exactly what they wanted to be driving.
So why did they take the Cash for Clunker plunge? $4,500 (or more) being knocked off the sticker price of a new car is a pretty strong incentive. Throw that discount in with the thought of driving a shiny new car that won't (or shouldn't) break down and you have a combination too powerful for some people to resist. Now that the monthly auto payments are starting, some of those people are apparently having second thoughts.
Questions? Comments? BehindTheWheel@cnbc.com