$123 million in ‘clunkers’ rebates left on the table; 700,000 cars sold
The “cash for clunkers” program may have irritated dealers across the nation with its computer reporting requirements, but it definitely helped them sell cars. Almost 700,000 of them, according to a final tally released today by the U.S. Department of Transportation.
But the Car Allowance Rebate System received applications for a total of $2.877 billion by the federal government’s 5 p.m. deadline Tuesday, well below the $3 billion allotted for the program, according to the department.
The government is touting the program as a success, despite administrative headaches with its electronic registration system that left local dealers fuming as they scrambled to meet the Tuesday deadline.
Dealers will likely also be unhappy that the government’s deadline and subsequent rush for submissions resulted in rebate money left on the table.
About 42,000 jobs will be created in the second half of 2009 because of car purchases through the program, according to the department.
Read more from the department’s press announcement:
“American consumers and workers were the clear winners thanks to the cash for clunkers program,” said U.S. Transportation Secretary Ray LaHood. “Manufacturing plants have added shifts and recalled workers. Moribund showrooms were brought back to life and consumers bought fuel efficient cars that will save them money and improve the environment.”
“This is one of the best economic news stories we’ve seen and I’m proud we were able to give consumers a helping hand,” Secretary LaHood said.
According to a preliminary analysis by the White House Council of Economic Advisers, the CARS program will:
- Boost economic growth in the third quarter of 2009 by 0.3-0.4 percentage points at an annual rate thanks to increased auto sales in July and August.
- Will sustain the increase in GDP in the fourth quarter because of increased auto production to replace depleted inventories.
- Will create or save 42,000 jobs in the second half of 2009. Those jobs are expected to remain well after the program’s close.
Ford and General Motors recently announced production increases for both the third and fourth quarters as a result of the demand generated by the program. Honda also said it will be increasing production at its U.S. plants in East Liberty and Marysville, Ohio and in Lincoln, Alabama.
In addition, the program provides good news for the environment. That’s because 84 percent of consumers traded in trucks and 59 percent purchased passenger cars. The average fuel economy of the vehicles traded in was 15.8 miles per gallon and the average fuel economy of vehicles purchased is 24.9 mpg. – a 58 percent improvement.
“This is a win for the economy, a win for the environment and a win for American consumers,” Secretary LaHood said.
With the end of transactions under the program, the Department of Transportation is augmenting a team that already includes more than 2,000 people processing dealer applications for rebates.