Cash for clunkers generates more than 700,000 new car sales
- August 26, 2009
By the time it ended last night, the federal government’s “Cash for Clunkers” program generated nearly 700,000 new car sales and came in under budget. Dealers filed rebate vouchers worth $2.8 billion — with $98.5 million filed by Virginia dealers — just shy of the $3 billion Congress allotted for the stimulus program.
The Virginia Automobile Dealers’ Association didn’t have statistics today on how many cars sold here or a total sales figure, which will exceed the requested voucher amount. Still, an official characterized the program as a success. “The dealers were pleased to move that much inventory,” said Michael Allen, director of public affairs for the state’s trade group. “The program would be more successful if the government was paying them.”
Slow reimbursement under the rebate program has been a frequent complaint. As of last week, less than 3 percent of participating Virginia dealers had been paid, said Allen. “Cash for Clunkers” offered consumers rebates of up to $4,500 off the price of a new vehicle in return for trading in older cars that got 18 miles per gallon or less in mileage.
According to the U. S. Department of Transportation, the Toyota Corolla was the most popular new car purchased, followed by the Honda Civic, the Toyota Camry, and the Ford Focus.
Top trade-in vehicles included the Ford Explorer (No. 1), followed by the Ford F150 pickup and the Jeep Grand Cherokee. The transportation department said
the average trade produced a 58 percent fuel savings, with the average “clunker” getting 15.8 miles per gallon, compared to 24.9 miles per gallon for the new vehicles.
The White House Council of Economic Advisors expects the program to boost economic growth in the third quarter by 0.3 -0.4 percentage points, because of increased auto sales in July and August. However, Virginia has seen a slump in its number of auto dealerships as have other states. Allen said more than 40 dealerships have closed in Virginia over the past two years as a result of bankruptcy filings by Chrysler and General Motors. “We expect several more to close by the end of the year,” he said.