Cash for Clunkers Generates Interest

By Michelle Krebs July 28, 2009

One thing is for sure: Cash for Clunkers has captured the interest of Americans. Whether it generates hoped-for extra sales for the U.S. auto industry remains to be seen.

The Transportation Department, which administers the program officially known as the Car Allowance Rebate System (CARS), reported Monday that nearly 16,000 auto dealers signed up to participate in the program, the government's hotline had handled more than 45,000 telephone inquiries(866 CAR-7891), and the CARS Web site had 1.5 million hits since Friday, bringing the total to more than 4 million since the program was announced.

Dealers nationwide report a surge of showroom traffic. Many say far more people are coming into the showroom than actually qualify for Cash for Clunkers, which provides new-car buyers with  $3,500 or $4,500 toward the purchase of a more fuel-efficient vehicle than their trade-in. And, dealers say, many consumers are buying even though they don't have a qualified clunker.

Indeed, Cash for Clunkers was intended to spur vehicle sales, which have been running at levels not seen in decades. Edmunds.com forecasts the Cash for Clunkers program could generate extra sales in July and push the Seasonally Adjusted Sales Rate (SAAR) above the 10 million mark for the first time this year.

CARS has not been trouble-free, however. The government's Web site was overloaded Friday with consumer inquiries and dealer visits to register and download the just-released 136-page rulebook. The Environmental Protection Agency "refreshed" its combined fuel economy ratings, so that some vehicles that qualified as clunkers on Thursday no longer were on Friday and vice versa. Dealers say local scrapyards are ill-prepared to handle the influx of the clunkers being traded in and are required to be scrapped under the program.

The showroom rush could be short-lived as many consumers are scrambling to get in on the program while it lasts. The program has $1 billion in funding -- enough for 250,000 vehicles. The program expires November 1 -- or earlier if the money runs out.

Transportation Secretary Ray LaHood told reporters at the program's kick-off that the program could be extended. In fact, some Congressmen are already proposing as much.

"We need to see if the program is successful. We think it will be," LaHood told reporters. "We're going to know pretty quickly if we are going to run through the billion dollars or not."

For more information on Cash for Clunkers, please visit http://www.edmunds.com/cash-for-clunkers/. Lively discussions about Cash for Clunkers are talking place on Edmunds' CarSpace.com message boards at http://townhall-talk.edmunds.com/direct/view/.f1db290. -- By Michelle Krebs

 

Dealers Registered

for Cash for Clunkers

By Make

Source: Dept. of Transportation

OEM	Number of Dealerships Registered
Acura	244
Audi	211
BMW	246
Chrysler	2,243
Ford	1,678
Ford- Lincoln-Mercury	871
Ford-Mercury	444
GM	5,653
Honda	1,084
Hyundai	846
Infiniti	104
Kia	661
Lexus	148
Lincoln- Mercury	305
Mazda	676
Mercedes-Benz	187
Mini	63
Mitsubishi	384
Nissan	1,098
Other	293
Smart	70
Subaru	545
Suzuki	325
Toyota	1,236
Volkswagen	599
Volvo	170
Total	20,384

Michelle Krebs:  is Editor-in-Chief of AutoObserver.com. Follow @AutoObserver on Twitter.