Abstract: Following the 2008 financial crisis, the U.S. government initiated the Cash for Clunkers program in July 2009, officially known as the Car Allowance Rebate System (CARS). This program aimed to encourage Americans to replace their old vehicles with new ones by offering financial incentives. It ran for one month and cost the Treasury $2.85 billion. While the government considered it a successful anti-recession measure, both the automotive industry and economists disagreed, stating that the results fell short of initial expectations. An analysis of this historical event reveals three key policy lessons.
