‘Cash for Clunkers' Ends After Putting 690,000 New Cars on the Road

Most autos turned in as part of "Cash for Clunkers" were made by a Detroit firm, while most bought through the program were from an Asian automaker.
Most autos turned in as part of "Cash for Clunkers" were made by a Detroit firm, while most bought through the program were from an Asian automaker. (By James A. Parcell For The Washington Post)
By Frank Ahrens
Washington Post Staff Writer
Thursday, August 27, 2009

The federal government's month-long "Cash for Clunkers" program ended after having spent almost the entire $3 billion allotted and putting 690,114 new, more fuel-efficient cars on the road, the Transportation Department said Wednesday.

Car buyers in the District, Maryland and Virginia were responsible for $174 million of the total sum, with the vast majority from Maryland and Virginia, according to government figures. Only 15 Cash for Clunkers transactions took place in the District -- fewer , by far, than in any state and probably attributable to the small number of auto dealers in the nation's capital.

One auto analyst called the program a success, if only because his research showed that it was responsible for saving 39,000 jobs that otherwise would have been eliminated.

"It's really more substantial than we had thought in terms of stimulus," said David Cole, chairman of the Center for Automotive Research. "This is companies putting people back to work."

General Motors announced last week that it will reinstate 1,350 workers and add overtime for about 10,000 at three plants, as the automaker replenishes inventory sold during the government program. Honda also said it will increase U.S. production.

The other big winners in the program were Asian automakers. Eight of the top 10 new cars purchased through the program came from Honda, Hyundai, Nissan and Toyota, which claimed the top spot with its Corolla. The Corolla, Honda Civic and Ford Focus are manufactured in the United States.

The only vehicles produced by U.S. automakers in the top 10 were the Ford Escape and Focus.

By contrast, all of the top 10 clunkers turned in were made by a Detroit company, with the four-wheel-drive Ford Explorer SUV, Ford F-150 pickup and the four-wheel-drive Jeep Grand Cherokee taking the top three spots.

Even though no General Motors vehicle cracked the top 10 of best-sellers, GM's sales volume was strong, finishing second behind Toyota with 17.6 percent of all new vehicles sold.

The new cars average about 9 miles per gallon better than the clunkers they replaced, the Transportation Department said.

"Moribund showrooms were brought back to life and consumers bought fuel-efficient cars that will save them money and improve the environment," Transportation Secretary Ray LaHood said in a statement Wednesday.

Under the program, car buyers were eligible for a federal government credit worth up to $4,500 toward the purchase of a new qualifying vehicle.

What's unclear is whether the clunkers program will be responsible for an overall increase in auto sales in the coming years, or if it merely pulled forward sales that consumers already planned to make in the future, resulting in no net gain for auto sales over the long run.

The program, which had been a part of the original stimulus bill earlier this year but was deleted before final passage, was so popular that it required an additional $2 billion in funding after it was underway.

Potential buyers could take advantage of the program until 8 p.m. Monday, but the government was forced to twice extend the deadline for dealers to submit paperwork. Some dealers complained about the program, saying they were not being reimbursed by the government quickly enough. Some set up their own, privately run deals.

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