With the passing of the ‘Clunkers’ program, there is plenty of speculation remaining as to whether or not the program was successful. That sort of depends upon where you are viewing it I suppose, but no doubt, some good things did happen. Putting cash in the hands of consumers via the rebate clearly sparked some of that cautionary demand to take action. One view might be to take a look at the U. S. Department of Transportation statistics. I won’t go in to all of them so here are a few highlights.
“American consumers and workers were the clear winners thanks to Cash for Clunkers program,” said Ray LaHood, U.S. transportation secretary. “Manufacturing plants have added shifts and recalled workers. Moribund (or bare) showrooms were brought back to life and consumers bought fuel-efficient cars that will save them money and improve the environment.”
Overall, rebate applications worth $2.877 billion were submitted by the Tuesday deadline. This covered 690,114 applications.
Top 10 Most Purchased Autos
Of the top 10 most purchased vehicles under the Cash for Clunkers program, only five automakers made the cut. This includes Toyota, Honda, Ford, Hyundai and Nissan. Toyota and Honda each had three models make the most purchased list, while Ford was close behind with two. Nissan and Hyundai meanwhile each had one model making the most popular Cash for Clunkers purchases.
Top Most Traded In Autos
The Ford Explorer 4WD and the Ford F-150 Pickup 2WD were the significant leaders in what was traded in. Of the vehicles traded-in, 84 percent were trucks with 59 percent of customers purchasing passenger cars. The average trade-in mileage was 15.8 mpg, which leads to an overall increase of 9.2 mpg, or 58 percent climb, as the average new vehicle purchased receives 24.9 mpg.
Offering preliminary insight into the impact of the Clunkers program will have on the economy, the White House Council of Economic Advisers predicted the program will ramp up economic growth in the third quarter by about 0.3 to 0.4 percent at an annual rate due to the sales. The gross domestic product will be sustained thanks to increased vehicle production and to fulfill inventory requirements, the group indicated. Furthermore, an excepted 42,000 jobs will be created or saved.
New-Vehicle Manufacturer Percentages:
Toyota: 19.4 percent
General Motors: 17.6 percent
Ford: 14.4 percent
Honda: 13 percent
Nissan: 8.7 percent
Hyundai: 7.2 percent
Chrysler: 6.6 percent
There is, as we’ve mentioned many times, a large gap in opinions of just how successful the program was. However, what it did do is create an artificial spike in consumer spending. If you think about it, the conclusion that was most promoted by the non-objective major newscasters who thought of this as a good idea, was to proclaim its success.
With the direct lending markets still in mourning from the failed practices of many banks mortgage fiasco, a huge market still exists for auto loans and refinancing for everyone who does not have a 720+ FICO score. In the meantime, and still a “nightmare” is the fact that dealerships are still waiting for their money, and most have stopped junking the trade-ins in fear of Uncle Sam failing to reimburse them under the program. Time will tell. What do you think? Good or bad, let us know.