Feds Claim Clunkers Program Neared 700,000 Sales. Now What?
Toyota's Corolla was the most purchased car under the Cash for Clunkers program.
The Department of Transportation is tooting its own horn. Claiming overwhelming success for the Cash for Clunkers program, the federal government is crowing about the 690,114 sales the program spurred, the fuel economy gains made, and the American jobs restored.
But there's the nagging fact that vehicle transaction prices actually rose during the program, as some manufacturers and dealers cut back on their own incentive offerings. Customers taking advantage of the program still got great deals -- just not as great as if they'd been able to simply tack the C4C rebate onto the market prices that existed before the program.
Meanwhile, the DOT statement trumpets that the the top-selling cars, including the Ford Focus, Toyota Corolla, and Honda Civic, were made in America. As recently as last week, automakers ramped up production to meet demand, adding shifts at factories and hiring (or hiring back) American workers.
The models purchased with the federal rebates were, on average, 58% more fuel-efficient than the trade-ins, which were mostly domestic light trucks. Not surprising anyone, the biggest winners overall were Japanese automakers Toyota, Honda and Nissan, whose cars were the choice of 41 percent of C4C vehicle buyers.
Nonethless, the government is enjoying its rare day in the sun. According to a preliminary analysis by the White House Council of Economic Advisers, the CARS program will:
- Boost economic growth in the third quarter of 2009 by 0.3-0.4 percentage points at an annual rate thanks to increased auto sales in July and August.
- Sustain the increase in GDP in the fourth quarter because of increased auto production to replace depleted inventories.
- Create or save 42,000 jobs in the second half of 2009. Those jobs are expected to remain well after the program's close.
Whether these rosy predictions come true remains to be seen, but there's another prediction as well: The pace of sales, particularly for domestic vehicles, will drop significantly now that the program has come to an end and vehicle inventories are depleted. The only question is, how far?
- Posted by
- Joanne Helperin August 26, 2009, 3:44 PM
- Permalink
- Categories:
- Automotive Consumer News, Ford, Fuel Economy, Honda, Nissan, Toyota, Vehicle Incentives and Rebates
- Technorati Tags:
- C4C, CARS Program, Cash for Clunkers, Ford Focus, Honda Civic, Toyota Corolla
Well, part of the point was to help out the dealers, which this did I suppose. The worst part of the whole program is that now the manufacturers and dealers get to tighten their belts once again, as this level of purchasing is clearly not sustainable, but in terms of using funds to directly help out a segment of the economy, I guess it's hard to say that this hasn't been quite successful.
I will call it a one month harvest. Work hard before the time is up and wait to get paid.
Well, the gov't could have just given all of us taxpayers a $4500 refund (it IS our money, after all) and let us choose our own vehicles or whatever else we needed... but what fun would that have been? I mean God forbid we get something WE the people want instead of what the government chooses for us.