And the Clunkers trade-in new car sales winner is?
There’s good news and bad news about the government’s Car Allowance Rebate System (CARS) or “cash for clunkers” program, depending on your point of view.
First, after months of debate that started last January in Congress — as China and European countries went ahead with their own Clunkers programs — the U.S. version officially got under way in late July. CARS immediately increased vehicles sales by at least 250,000 units or more. When the first $1 billion in taxpayer funding evaporated in about a week, Congress took $2 billion from another auto technology program to keep CARS rolling. That cash is now apparently gone, or will be by September.
An announcement could come as early as today that the program’s $3,500 to $4,500 rebates are over, but we’re guessing that the Obama administration will face the same problem that automakers have historically had with rebates – once cash handouts are in place they are almost impossible to remove as buyers simply wait for the next round of rebates or stay out of the market. We’ll see how this plays out in the depressed economy.
Meanwhile, without question, the program is wildly successful at boosting auto sales. New vehicle retail sales in August are now forecasted to cross the 1-million-unit mark for the first time in the past 12 months, according to J.D. Power and Associates, which gathers real-time transaction data from more than 10,000 dealerships across the United States.
Based on the first 13 selling days of the month, retail sales for the month of August are expected to come in at slightly more than 1 million units, up nearly 2% from one year ago. This marks the first increase in retail sales volume since June of 2007.