Those pandemic stimulus checks actually kept used car prices from going even higher by getting people to trade in their old rides.
March 26, 2026
Original Paper
Stimulating Auto Markets
SSRN · 6464919
The Takeaway
While most people assume that printing money for stimulus checks solely fuels inflation, this research shows a stabilizing effect in the secondary market. By helping households upgrade to new cars, the stimulus flooded the used market with trade-in supply, which partially offset the massive price spikes seen during the pandemic.
From the abstract
How does fiscal stimulus affect durable goods sales and to what extent does stimulus drive inflation? We study this question in the context of how the unprecedented pandemic fiscal stimulus affected household car purchases and auto prices. Using administrative data on vehicle registrations, we exploit the timing of nearly $900 billion in stimulus payments and geographic differences in program exposure to identify causal effects on sales. We find the stimulus increased purchases by 5.5 million ve