July 29, 2009 3:21PM 

# Using ‘Cash For Clunkers’ Money to Buy a Muscle Car 

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![chevelle](/sites/cato.org/files/styles/pubs_2x/public/wp-content/uploads/chevelle.jpg?itok=FLK7qGoe) 

ABC News [reports](http://www.abcnews.go.com/Business/Technology/story?id=8202465&page=1) that the “Cash for Clunkers” scheme, a government program that offers a rebate to people who trade in vehicles with low gas mileage for more fuel efficient cars, is gaining popularity:

> The program is off to a fast start. In less than a week, 8,000 cars have been traded in for new ones — deals that might not have happened if Washington were not offering people $3,500 to $4,500 to get their aging gas guzzlers off the road.

In June, Cato senior fellow Alan Reynolds explained [ how you can use that money to buy the muscle car or truck you always wanted](https://www.cato.org/2009/06/10/cash-for-clunkers-lesson-how-to-use-the-to-buy-a-gas-guzzler/):

> Consider **how easy it would be to game this giveaway program** by using that $4,500 voucher to buy a big SUV or V‑8 muscle car.
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> First of all, with Chrysler and GM dealerships folding, it should be easy to buy a mediocre Chevy Cobalt or Dodge Caliber for about $10,000 more than the voucher.
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> What you do next is **sell** that boring econobox, even if you end up with $1,000 less than you paid — that still leaves you with $3,500 of free money, courtesy of taxpayers.
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> As this process unfolds, the flood of resold small cars will make it even harder for GM, Chrysler and Ford dealers to get a decent price for small cars, because of added competition from new cars being resold as used.
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> That’s their problem, not yours.
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> So, take the $9,000 net from reselling the crummy little car plus the $4,500 from Uncle Sam. Then **use that $13,500 to make a big down payment on a used Cadillac Escalade, Toyota Tundra pickup or Corvette.**
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> File this under “unintended consequences” (my own file is running out of space).

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