The last time they did “Cash For Clunkers”, the used car market almost went under.
The time it was done, the used market got tight and prices went up because what would have been on the market had to be chopped up. My old barber (he retired, alas) went to the dealer to trade up on his used small SUV and with the summer rebates they were offering, buying new instead (even without the clunkers money, which he wasn't eligible for) saved him about five grand.
Who buys used cars? Poorer people, students, people just starting out. This became a HUGE tax on the poor because the SUPPLY of used cars they purchase dried up.