Clunkers' Fair Success

The CARS or "Clunkers" program seems to be having modest success as evidenced from new car sales in July:

The average mileage for new vehicles rose from 21.4 miles per gallon in June to 22.1 mpg in July. That may not sound like much, but it’s the highest mileage that researchers at the University of Michigan have seen since the Environmental Protection Agency reconfigured mileage estimates in October 2007. It’s also the biggest one-month jump.

Study co-author Michael Sivak, a professor at the university’s Transportation Research Institute, noted that the improvement came even as gas prices fell and unemployment levels shrank somewhat. Normally, those factors lead to the purchase of more gas guzzlers.

The higher mileage shows the effect of Cash for Clunkers, said Sivak, who said he expects the jump to be even bigger when August figures come out. That’s because the trade-in rebate program got going only in late July.

- Brewskie

Cash-for-Clunkers' Impact

Here's some info. of CARS' recent impact:

--Roughly two thirds of deals have resulted in consumers receiving $4500 credit, which applied to only the most fuel efficient trades.

--During the week that the 'Cash for Clunkers' program was launched, GM's small car sales increased 54.8 percent over the preceding week.

--Toyota moved 78 percent of their Cash for Clunkers volume on vehicles that together average 30 mpg, and 39 percent of volume on the Corolla and Prius, which together average 39.5 mpg.

--Ford has seen an average of 7 mpg improvement on Clunkers trades, which represents an estimated annual fuel savings of 228 gallons per customer. The 28 mpg (EPA) Ford Focus is nearly 30 percent of all Ford's Clunker sales.

--Mazda, as of yesterday, saw 57 percent of transactions reported by dealers to be for the purchase of the MAZDA3, the brand's most fuel efficient model at 27 mpg (EPA).

- Brewskie

House Approves Additional $2 Billion for Clunkers

Due to popular demand, the US House of Representatives approved legislation to give an additional $2 billion to CARS.

The US House of Representatives passed legislation Friday that willcontinue a program designed to trade in inefficient cars for new ones, justone day after the week-old $1 billion effort exhausted its funds due tocustomers rapidly trading in their old vehicles.

The "Cash-for-Clunkers" legislation gives $2 billion to the Department ofTransportation out of the Obama administration's $787 billion economicstimulus
bill. The lopsided 316-109 vote showed huge support for a program,which is supported by auto manufacturers, unions, and dealers.

DOT launched the program last week after the legislation became law this summer.It originally included $1 billion to get 250,000 cars traded in fornew ones, but DOT and the White House informed Congress Thursday the money wasexhausted.

"This is an unprecedented success," said Representative Betty Sutton, an Ohio Democrat who introduced the original legislation creating the program.

Consumers could get $3,500 or $4,500 rebates to hand in their old car.The size of the rebate depends upon the fuel economy of the original vehicleand of the new vehicle, with more money going toward a greater difference inthe two.

The money to keep the program alive will be taken out of the $6 billionrenewable energy loan guarantee program run by the Department of Energy. The$2 billion taken out of the renewables program was intended to be spent nextyear but Democratic leadership determined that it could be better spent now oncash-for-clunkers.

- Brewskie