Clunkers Program Sells 700,000 Cars

WASHINGTON (AP) -- Cash for Clunkers generated nearly 700,000 new car sales and ended under its $3 billion budget, the Transportation Department said Wednesday.

Releasing final data, the government said dealers submitted 690,114 vouchers totaling $2.88 billion. New car sales through the program ended late Monday and dealers were allowed to submit paperwork to the government until late Tuesday.

Japanese automakers Toyota, Honda and Nissan accounted for 41 percent of the new vehicle sales, outpacing Detroit automakers General Motors, Ford and Chrysler, which had a share of nearly 39 percent. Toyota Motor Corp. led the industry with 19.4 percent of new sales, followed by General Motors Co. with 17.6 percent and Ford Motor Co. with 14.4 percent.

The Toyota Corolla was the most popular new vehicle purchased under the program, followed by the Honda Civic, Toyota Camry and Ford Focus.

Transportation Secretary Ray LaHood said U.S. consumers and workers were "the clear winners" under the program. "Manufacturing plants have added shifts and recalled workers. Moribund showrooms were brought back to life and consumers bought fuel-efficient cars that will save them money and improve the environment," he said.

The White House Council of Economic Advisers said the program will boost economic growth in the third quarter by 0.3 to 0.4 percentage points because of the increased auto sales in July and August. An estimated 42,000 jobs will be created or saved during the second half of the year, the White House said.

The program, which began in late July, offered consumers rebates of $3,500 or $4,500 off the price of a new vehicle in return for trading in their older, less fuel-efficient vehicles. The trade-in vehicles needed to get 18 miles per gallon or less and were then scrapped.

It proved far more popular than lawmakers originally thought. Congress was forced to add another $2 billion to the original $1 billion budget when the first pot of money nearly ran out in a week. The extra money was supposed to last through Labor Day, but in the end, Cash for Clunkers ran only about a month.

Dealers loved the new sales, but reported major hassles trying to get the government to repay them for the rebates they gave customers. The government extended the deadline for them to file deals, but many still haven't received their money.

Peter Kitzmiller, president of the Maryland Automobile Dealers Association, said most dealers appeared to get their paperwork in by the Tuesday night deadline. He expressed hope the pace of repayments would pick up now that government officials are working through the backlog.

The Transportation Department said Wednesday that 2,000 people are processing dealer applications, but Kitzmiller said the rate of repayment hasn't increased. "I'm a little concerned that we haven't seen any improvement," he said.

The government said 84 percent of the trade-ins were trucks and 59 percent of the new vehicles were passenger cars. New vehicles bought through Cash for Clunkers had an average fuel-efficiency of 24.9 miles per gallon, compared with an average of 15.8 mpg for trade-ins, a 58 percent improvement.

American companies accounted for all the top-10 traded-in vehicles. The Ford Explorer four-wheel-drive was the most popular, followed by the Ford F-150 Pickup two-wheel-drive, the Jeep Grand Cherokee four-wheel-drive and Ford Explorer two-wheel-drive.

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Sustainable Impact? 8/26/2009 4:43:00 PM I'd be very interested to see how well the 42000 new or saved jobs will last, now that so many new vehicles have been sold as a result of this program. Or will potential buyers now wait for the next great gov't deal before they consider a new car? Also, 2000 workers need to process 350 applications each to deal with the 700,000 cash-for-clunkers deals. Any thoughts about how long that might reasonable take? I also wonder what the most popular import vehicle traded in (as a clunker) was? None made the top four (but Ford captured 3 of them!)
The Taxpayer was the Clear Loser 8/26/2009 4:52:00 PM Right, I'd love to see the air quality indices before and after the Clunkulus program and show me the improvement. I'd wager a month's salary there will not be a measurable change. Now that the spending spree is over, we can get back to slow production lines and moribund showrooms. How naive can they be that they think this fixes thing in the long run??
re: Sustainable impact ? 8/26/2009 5:00:00 PM Not-to-worry, at Least those 2,000 gov't. jobs will be safe; our omniscient leader BHO won't Ever reduce gov't. jobs.
The low income tax payer gets hit 8/26/2009 5:30:00 PM With 700K older but many still serviceable vehicles off of the road it would seem many used car lots will be hurting for decent older vehicles that were destroyed that could have provided tranportation for low income tax payers. The "Clunker" program only benefited people that had very good credit or cash to purchase a new vehicle. And Obama claims he is a champion of the common man.
Cash for Clunkers 8/26/2009 5:35:00 PM Where did all of this money come from to buy these clunkers? The working man's pocket! We can't afford to trade in for a new car yet we will be the ones paying for others that bought the new cars for the cash for clunker deals. Why did't the government just lower taxes by 4500 on all of the working class and we could buy our own or spend the money on other items.
Recovery from meltdown is slow and painful 8/26/2009 5:41:00 PM The financial meltdown dropped the economy into a deep abyss, and recovery has to be done brick by brick and stone by stone to rebuilt the foundations of our economy. 42000 jobs for a few months equate a few good size bricks. Their paychecks will create demand for a broad spectrum of general goods and move our GDP up a notch and bring the economy closer to normalcy. That is what a recovery is about.
For the year 8/26/2009 5:54:00 PM If the government were to extend the Cash for Clunkers program to $30 billion, the domestic auto industry could do 7 million cars, far less than the 16 million they did in 2008, but a realistic goal for this year in this economy. Too bad the government won't add enough to the kitty and the industry won't do that well.
clunkers 8/26/2009 8:33:00 PM All the came with a new car and a loan. I wonder how many of these loans will be re-paid or will Obama have to bail out the dead beats for this too?
More popular than lawmakers thought??? 8/27/2009 7:58:00 AM How stupid are these "lawmakers". Giving away taxpayer's money to people who didn't earn it, of course it was popular. Mr. Hood thinks flushing $3billion dollars down the toilet to bail out the japanese automakers makes US the winners!!! With that kind of logic Madoff's investors were big winners too. And these clowns want to run our healthcare, God help us.
Manufacturing plants have added shifts and recalled workers 8/27/2009 8:18:00 AM I would like to know what plants that would be, in Japan ?
Doesn't Add Up 8/27/2009 8:29:00 AM $3 Billion minus 2.88 Billion equals $120 Million. Where is this money. I wish I could have a $120 Million cushion.
Taxpayer, Impact and Other 8/27/2009 10:03:00 AM I've been watching this whole politicized process, and have made the following observations. 1) The program was well intentioned, but little thought apparently was given to execution. The resulting financial burden on dealers is horrendous. 2)A great portion of the sales came from pent up demand. These buyers would have made the purchases anyway, but this was good incentive to get them into the showrooms, and off their wallets. 3)Since the program was touted as being an environmental thing, it would have been better administered by the EPA, using some of their generous funding. 4)One sure cause of a financial depression is that money stops circulating, as everyone is afraid to spend. The snowball effect on the economy is obvious. In this case, the trigger was broadly, the financial institutions that were caught up playing fast and loose with other people's money. Part of that were the overly generous doling out of mortgage loans, using adjustable rates, not indexed to anything except the desire of the lender for more profit. This of course, involved rapidly rising mortgage payments, and people that couldn't keep up the payments on their houses, and as a result losing everything. 5)The C4C program, along with some of the other incentives, has encouraged money to circulate again, which will ultimately result in economic recovery. In final analysis, the C4C program should have been available to import brands. The Japaneese manufacturers were being bolstered by their home governments. And WHY did it require a 13 page form to document each C4C deal? To me this looks like just another boondoggle, although the final product was great for the consumers the dealer had to suffer a great financial burden.
Recovery 2009 8/27/2009 10:11:00 AM The way some of the statements read some people really believe that 3 Billion is going to kick start the entire economy, for about one month it may help some folks but is not going to last. What we witnessed was a movement of taxpayer dollars as a gift to those who have a job and were able to afford a new car, they would more then likley have made a purchase this year and with a gift of up to 4500 could not pass it up. Now that they have made that purchase it is done. Those without a job are not going to get to back to work on this it is too little too late. What we need is a re-education project and we need it now to drive high tech enterprise in to looking at the US as a place to locate right now with up to a 50% drop out rate from our secondary schools we are leading the way to a total wipeout, too bring work back you need educated and motivated people who understand that you start at the bottom and work your way up. It is unfortunate that the elected leadership sees change as a catch all phase for raising taxes on those who have more as the cure too the problems, the overall problem is ignorance followed by greed.
Clear winner is Japan 8/27/2009 12:33:00 PM Looks like a majority of the money went to Japan, since they have the most reliable cars. Ford is making improvements. So how many jobs saved are not US.
Cash for Clunkers 8/27/2009 1:02:00 PM The public will now be blamed for having no confidence when it stops buying cars for the rest of the year. Ah the Audacity of Arrogance.
C4C 8/27/2009 3:42:00 PM C4C = Pay back to the UAW?
'help some folks' 8/27/2009 3:58:00 PM I don't get it why so many here are upset when tax dollars go to car manufacturers and admittedly some foreign companies do profit too - but that countriy is one that is bying US debt since decades and does finance the whole US trade deficit economy ... well what a polarized view you all have ... And spending 2 trillion on a wasted war in Iraq - I guess you all think that is fine...? W good - BO - bad hmm?
C4C 8/27/2009 6:44:00 PM If the 3 three can't compete they should have become the big two or one or the big none. If you are dumb enough to sign up for a sub-prime loan you deserve to loose your house. If you are a wall street bank that made the loans the bank and its management deserves be bought by a bank with integrity. Bush, BO and politicians reward failue and corruption. Who is defending them? Not me! Real change is needed. It is easy not to take personal responsibility because you have 6 billion other people to blame.
Who drives those old clunkers? 8/28/2009 12:06:00 AM Many of the people that drive those old clunkers do so because they simply can't afford to shell out in excess of $22,000 for a new car. While on the surface the C4C program has given the auto makers a brief respite from the current economic doldrums it certainly won't last any longer than the availability of the money for the program. I have a very strong suspicion that the real cost of the C4C program will begin to bubble to the surface in a couple months as those people that really couldn't afford a new car begin to default on their payments. This very same thing came to a head recently when too many people defaulted on their home mortgages. Back in 1995 the Democrats proudly proclaimed that they were able to get more people into the housing market than ever before. This was accomplished by forcing the mortgage institutions to underwrite loans for people that simply could not qualify under the time-proven banking practices prior to the early 1990s. The only thing that the Democrats accomplished was to light the fuse for a [sub-prime mortgage] time bomb that finally blew up a few years ago.
Free cash from children 8/28/2009 8:02:00 AM Free cash from children who are stuck with the debt. Knowing that the children have to pay back $9,000.00 for every $4,500.00 that congress borrows (at 4% for 25 years) to give away, who would design this theft? Congress has already spent ALL the money in the bank. There is none left. The statutory debt limit is $12,104,000,000,000.00 (12 Trillion) Please don't ask congress to spend any more. The greedy tax spenders in congress have NO plan to pay off the debt.
What are the odds... 8/28/2009 2:38:00 PM ...that in 6 to 12 months from now we have to suffer through a "car bubble" when lots of these vehicles get repo'd from people who overextended themselves?
@ Help some folks 8/28/2009 5:25:00 PM I have an idea that I believe would help. Instead of this C4C program that provides a stimulus to the automobile industry ONLY AS LONG as the money is available and no longer, how about offering tax incentives for manufacturers to bring manufacturing of goods back to the United States? The various manufacturers would then be inspired to hire American workers to build these products. Now THIS kind of stimulus would be both beneficial and long lasting to America. Contrast that with the so-called 'Stimulus' bill which will put people to work in some service-related jobs UNTIL THE MONEY RUNS OUT. Once the money is gone, so are the jobs. By the way, the democrats in Congress and this administration have managed to spend more money in the past seven months than ALL of the previous administrations in the United States COMBINED. You also made a comment about 2 trillion dollars 'wasted' on the war in Iraq. I see you take for granted that you will always be free and safe. Sometimes lives and dollars must be spent to ensure that safety. Furthermore, over 500 billion dollars (that's 1/2 trillion) are spent annually on the military by Congressional mandate. That comes to about 4% of the GDP of the United States. The lowest we've seen military spending was at 3% just prior to 9/11 and the highest was 1944 at almost 38%. The mainstream news media has chosen to ignore or cover up that tiny fact.
Re: What are the odds? 8/28/2009 9:50:00 PM I'll try to state this in a way that the very negative folks making some of the comments will understand, and in a way that will not insult them...the C4C program in effect offered a minimum trade in for the old cars, assuming they met the criteria of the program. This did NOT make lending institutions to make bad loans to people who may not be able to pay the loan back! NOBODY wants to repo a car, truck or whatever, because EVERYBODY with a stake loses, the customer, the dealer, the lender, the car maker. If anything, I would think that a person's credit would need to be much better than it was a couple of years ago for the same loan amount. The people that bought most of these cars would have bought new ones anyway, but were holding on to their money, "just in case". The program got them off their couches and into the showrooms, WHICH WAS THE PLAN, even though the administration tried to dress it up as an environmental thing.
We still do not have the full CARS story 8/28/2009 11:35:00 PM People at Edmunds.com will be reporting in upcoming days that Cash for Clunkers sales numbers from the government are misleading in that they break down sales by model with a specific engine. The surprises will include a lot more Fords in the top ten and even Ford F150s and Chevy Silverados among top sellers if you count all variations (including all engine types) of each model. Another surprise is a large number of buyers using the program bought with cash, so there will not be so many repo's as some are predicitng. Due to the speed at which people needed to decide and buy, there is likely to be a lot of buyer's remorse, though.
Great! 8/31/2009 7:59:00 AM They stimulated the ecomomy for a short while... Not such a bad thing. I did what it was supposed to do and wasn't just another government FLOP.

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