Short supply left by Cash for Clunkers will cause price surge

While cash-for-clunkers gave great rebates to those who qualified, consumers are going to be feeling the economic pinch in the months to come. The program has depleted inventories, and during a time when car shopping is usually at its peak, the short supply will cause a price surge, many analysts believe.

While the program was certainly successful in driving traffic to dealerships, it came along a bit late to be maximally effective. Jeremy Anwyl, CEO of, told CNN that the program would have seen much more benefit had it been launched in February, when inventories were high and sales were through the floor.

Anwyl said that auto sales will drop off 50 percent in the coming weeks. He said that prices will remain high for the next few months, but will then start to fall as inventory catches up with demand.

-By: Stephen Calogera

Source: CNNMoney