NEWS

With Another $2 Billion Behind It, Cash for Clunkers Rolls On

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According to the sales tracker Autodata, more than 220,000 vehicles have been sold using the program’s $3,500 or $4,500 incentive. Nationally, sales of cars and light trucks reached an annual pace of 11.2 million units for July, which is the highest level in the last 10 months.

Sales dipped this weekend from the extremes they reached when Cash for Clunkers first launched, but they were high nonetheless. For example, Los Angeles County auto dealers told the Los Angeles Times that weekend sales were 25%-50% higher than in recent months; the previous weekend — when many thought Cash for Clunkers would be ending – car sales doubled. The same dealer groups speculate that 80%-90% of sales could be attributed to Cash for Clunkers.

Dealers now face the problem of keeping up with demand, a concern they had not anticipated earlier in the year. Dealers report that they are having trouble keeping popular models in stock, including the Ford Focus, Toyota Prius and Dodge Challenger.

The real question is what will happen when the program expires on Nov. 1 or runs out of money, which some predict could happen around Labor Day. Sales will obviously lag, but will they plummet back to pre-Clunkers levels? Will the program have any lasting effect in buoying consumer confidence?

‘Cash for Clunkes’ Program Still Powering Sales (Los Angeles Times)

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