Cash for Clunkers Replaces 700,000 Vehicles with More Efficient Models

My husband is a mechanic, and we were both a little leery of the Cash for Clunkers program, particularly because it seemed like the clunkers were being wasted as a resource for people that can't afford new vehicle parts. Also I simply did not trust most people to really trade up to better mileage and effeciency. But lo and behold -- the program seems to have been a real success! As cited in the article below, the majority of truck owners traded their trucks in for cars, even the ones who were trading in heavy work vehicles. The reults also send a pretty clear message to American auto makers about what the public wants in a vehicle with their top-ten list, so perhaps they will pay attention this time and begin producing more effecient, long-lasting vehicles. Here is the rest of the article:

(From EERE Network News)

The popular Cash for Clunkers program ended its run on Aug. 25, and the program is estimated to have removed nearly 700,000 inefficient vehicles from U.S. roads.
Officially known as the Car Allowance Rebate System (CARS), the program achieved greater fuel economy gains than originally expected, as consumers chose more fuel-efficient models than were required by the program.
In fact, the average fuel economy of the traded-in vehicles, which were crushed, was 15.8 miles per gallon (mpg), while the average fuel economy of the newly purchased vehicles was 24.9 mpg — a gain of 9.1 mpg, or 58 percent.
That figure makes sense for trade-ins of old cars for new cars, because those trade-ins earned the maximum rebate with a 10 mpg increase in fuel economy. However, analysts expected trade-ins of light trucks (sport utility vehicles, pickups and vans) for new light trucks to drag down the fuel economy gains, as such trade-ins could earn the maximum rebate with a fuel economy gain of only 5 mpg. But according to the U.S. Department of Transportation (DOT), such truck-for-truck trade-ins were less common than expected, as 84 percent of the program participants traded in trucks, but only 41 percent purchased new trucks, which means that more than half of the truck owners traded their vehicles in for a car.
The results are even starker for heavier vehicles, as 8,134 heavy work trucks were traded in, but only 2,408 new heavy work trucks were purchased, and 116,909 large pickups or vans were traded in, but only 46,838 new ones were purchased. The fuel economy of the newly purchased cars was also 19 percent greater than the average fuel economy of all new cars available in the United States.
The CARS program allowed dealers to start providing rebates to customers on July 1, even though the program didn’t officially start until July 24. The billion-dollar program proved so popular that Congress had to quickly approve an additional $2 billion for the program, which was approved by President Obama on Aug. 7.
Despite the extra funding, the funds went quickly, and the DOT announced on Aug. 20 that the program would end on Aug. 24. Dealers had until the evening of Aug. 21 to submit their paperwork, and the results demonstrate that the DOT timed it pretty well, with rebate applications worth $2.877 billion submitted to the agency, leaving only $123 million in rebate funds unaccounted for. The program proved so popular that the DOT changed the rules, allowing people to buy cars even if the dealer was sold out on that model.
According to DOT, the top vehicles traded in under the program include sport utility vehicles, pickups and vans from Ford, Jeep, Dodge and Chevrolet.
The top 10 new vehicles purchased include cars from Toyota Motor Sales, American Honda Motor Co., Hyundai Motor America, Nissan North America and Ford Motor Co., with the Ford Focus and Ford Escape both making the top 10 list. The increased demand caused Ford to boost its production of the two vehicles at its assembly plants in Kansas City, Mo., and Wayne, Mich. Ford experienced year-to-year sales increases in both July and August. Toyota had three vehicles — the Corolla, Camry and Prius hybrid — on the top 10 list, and the company estimates that it accounted for nearly a third of the fuel savings achieved by the program.
Honda saw a near doubling of its sales of the fuel-efficient Fit, and the DOT notes that Honda will increase production at two plants in Ohio and one in Alabama. General Motors Corp. (GM) also experienced gains from the CARS program, attributing it to a 159 percent year-to-year increase in August sales of the Chevrolet Aveo, a 13.8 percent increase in Chevy Cobalt sales, a near doubling in Chevy Equinox sales, and a 26 percent boost in Chevy HHR sales. GM plans to increase production to restock inventories. Chrysler also credited the program with increased sales and has raised its production by 50,000 vehicles.

1 comment:

lisa said...

My husband and I took advantage of this program...We traded in our 1995 Mercury Marquis and bought a 2009 Chevy Colbalt...I love my new car.. We got $3500 for ours. We paid cash for the car..Well we borrowed against our 401K and we are paying ourselves back.The Colbalt made #10 on the list the last I heard. As I said trying to look at all the papers and I looked at the dealer and asked him point blank will we owe taxes on this...HE said no it wasn't in the 180 pages of red tape. So when the clash for clunkers closed down the following day the government said you will owe taxes on that money..I was livid, I was going to write my senators and congressmen and voice my opinion.. I decided I would check on my paper work...LOW AND BEHOLD on the bill of sale where they normally put in cash rebates for the sales of the cars they crossed out cash rebates and put in cash for clunkers and right next to the cash of clunkers it said (taxable)... My husband and I didn't see it..also when they charged the sales tax they did the sales tax on the price of the car before the clash for clunkers and the $2000 rebate we also got...So we got taxed on the full amount of the car and also will be taxed on the $3500 and the $2000 rebate come tax time... we did not pay sales tax after the rebates but before the rebates....The government giveth and taketh away..I will never purchase from a government program like this....ALSO when you get the rebates on those appliances you will be taxed before and after....so that $100 isn't going to be $100...like our $3500 wasn't really $3500...

I do want to say we had been planning on getting a new car in 6 months..so we didn't just go out and get one...but we got a good deal we thought..I do love my car and am very excited to have an AMERICAN MADE CAR...I support American made...Yeah my car is owned by the government..Yes alot of cars are made in America by American people but ALL Profits go to foreign companies and we didn't feel comfortable with that...I know I made some people mad and I am very sorry for that...This is my opinion only...Lisa