Posts Tagged ‘CARS program’

August Car Sales Slipping Slightly From July

Numbers look especially bad compared with Clunker-boosted ’09.

by on Aug.19, 2010

The metal is moving more slowly this month, says J.D. Power.

U.S. car sales appear to be slipping a bit this month, according to preliminary dealer data, though the industry trend line is up from the first half of 2010.

But anticipate some dire reporting when the full month’s numbers hit the headlines, industry analyst caution, because makers will be making year-over-year comparison to August 2009, when the federally-funded Cash for Clunkers program fueled an otherwise dismal U.S. auto market.

Everything about cars!

Based on figures for the first half of the month, retail car sales are off “slightly” from July’s strong pace, reports J.D. Power and Associates.  Excluding the fleet market – which has been propping up a number of makers, including some of the domestics – the Seasonally Adjusted Annual sales Rate, or SAAR, will slip to 8.9 million, compared with a retail SAAR of 9.2 million in July 2010, noted the California-based research firm.


Did “Cash for Clunkers” Program Help the Economy, Environment?

Actually economic and environmental effects are debatable.

by on Apr.30, 2010

Does this look like a healthy economy to you? (Click on the chart to enlarge.)

The House Committee on Energy and Commerce is interpreting a new General Accounting Office study of the “Cash for Clunkers” program as saying it met key goals of stimulating the economy and improving vehicle fuel economy.

If only it were that simple.

The press release from the Committee selectively quotes the GAO in what appears to be an attempt to justify the Administration’s economic policies in an election year.

The new GAO report, Lessons Learned from Cash for Clunkers Program, “confirms the beneficial impacts of the CARS program,” according to the Committee headed by Henry A. Waxman, a Democrat from California.

“The CARS program is a classic example of how good environmental policy can also be good economic policy,” said Chairman Waxman. “And it shows how Congress and President Obama have worked to get the American economy moving.”

GAO reviewed two key program goals: stimulating the economy and putting more fuel-efficient cars on the road, and concluded, “The program achieved these broad objectives.”

However, the report also says, “the extent to which it did so is uncertain. For example, nearly 680,000 consumers purchased or leased vehicles using the program’s credit, yet some of these sales would have happened anyway.”    (more…)

Cash for Clunkers Did Better Than Expected

Should program be repeated, authors ask.

by on Mar.09, 2010

Despite some problems, the Cash for Clunkers program was a big success, contends a new study.

Despite some well-publicized problems with the administration of last year’s so-called Cash for Clunkers program, the venture performed even better than anticipated, according to a new study that shows it brought significant incremental sales to a struggling U.S. automotive market.

In all, the Cash Allowance Rebate System, or CARS, directly generated 542,000 sales that would not have been made without the program, which offered qualifying buyers incentives of up to $4,500, reveals a new study by Maritz Automotive Research Group.  In addition, about 250,000 “halo sales” were created, according to Maritz Vice President Dave Fish.  Those were sales made to buyers who either didn’t qualify for the tax credits or who decided to purchase a vehicle that wan’t covered by CARS.

Alternative Views!

“As far as taxpayers are concerned,” said Fish, “from a return-on-investment standpoint, (the program) certainly met its goals” of both stimulating the automotive market and removing inefficient, polluting cars from the road.”


Clunkers Program Claimed Collectibles

Federal program attracted some rare and exotic trade-ins.

by on Sep.24, 2009

Would you pay $4,500 for a 1997 Bentley Continental R.  That's all one owner got for the luxury sedan, originally priced around $300,000, as a Cash-for-Clunkers trade-in.

Would you pay $4,500 for a 1997 Bentley Continental R. That's all one owner got for the luxury sedan, originally priced around $300,000, as a Cash-for-Clunkers trade-in.

My friend Ralph had to spend a Saturday afternoon in his garage getting his old beater running again before he could trade it in under the recently-concluded Cash-for-Clunkers program.

And he wasn’t alone.  The federal program, formally known as the Cash Allowance Rebate System, was designed to get older, gas-guzzling, pollution-spewing clunkers off the road by offering owners $3,500 or $4,500 vouchers, depending on the mileage they were trading in on.  And, by and large, that was a pretty good deal for most of the roughly 800,000 vehicles the government got off the road.

Trade In Your Old News Source!

Trade In Your Old News Source!

But government records suggest that at least of the few of the trade-ins might have drawn a fair bit more if their owners had really looked for the best possible deal.  And some of the so-called “clunkers” were pretty exotic and potentially desirable collector cars.


Congratulations, Automobile Dealers of America!

Secretary of Transportation thanks dealers for CARS program.

by on Sep.16, 2009

The Republican from Illinois

The Republican from Illinois characterized CARS as “the single most successful short-term economic stimulus program in history.”

U.S. Secretary of Transportation Ray LaHood thanked auto dealers for their participation in the CARS program  – aka Cash for Clunkers –  in a speech before the National Automobile Dealers Association Convention today.

NADA had been critical of the red tape around what it thought was a needlessly complex program and the associated delays in reimbursement to dealers of rebates of up to $4,500 per Clunker trade-in.

LaHood said that as of this morning 565,690 CARS vouchers have been paid by taxpayers. This translates to almost $2.4 billion covering about 70% of dealers owed money.

LaHood said, “By now, it’s pretty clear that the Car Allowance Rebate System, or CARS program, succeeded beyond everyone’s expectations, and we can all take pride in what we’ve accomplished. Working together, we have delivered the goods to provide a struggling economy with a significant boost.”

To back that up LaHood made the  following points:

  • August retail sales up 2.7%
  • August automobile dealer sales up 10.6%
  • Sales boosted by about 440,000 vehicles between June and August
  • One of the largest 2-month spikes in auto sales on record
  • Increased production at Ford, GM, Toyota, and Honda
  • 60% improvement in fuel economy
  • $3.6 billion contributed to GDP for 2009
  • Millions in local and state sales tax revenues to cash-strapped states


Now What? Industry Needs to Keep Clunkers Momentum Going

Dealers frantic to get claims in before CARS wraps up.

by on Aug.25, 2009

It's all over but the payback.  While dealers wait for their money from the government, industry analysts try to figure what impact the CARS program will have on sales during the months to come.

It's all over but the payback. While dealers wait for their money from the government, industry analysts try to figure what impact the CARS program will have on sales during the months to come.

By noon today, U.S. auto retailers will have to submit the final paperwork for their last Cash-for-Clunkers deals or forfeit the refunds they expect from the federal government.

The Cash Allowance Rebate System, or CARS, as it’s more formally known, has come to a close, barely one month and $3 billion after it began. As of midday Monday, dealers had already submitted claims covering 625,000 vehicles, which would generate at least $2.6 billion in voucher payments for dealers.

Your Inside Source!

Your Inside Source!

A sizable number of claims have yet to be submitted, however, and dealers were working frantically into the night trying to get the last paperwork completed, despite the decision to extend the deadline until midday Wednesday. In fact, that extension was largely due to the repeated crashes of the government’s own computer system, on Monday.


Marty’s Marketing Minutia

Clunkers, Concurs, Comments & Critiques

by on Aug.24, 2009

OK, 489,269 New Cars Were Sold, Now What?

Now what?

Now what?

What’s a dealer to do? Now that the program has all but ended, many dealers selling small, energy efficient and environmentally efficacious vehicles have no cars on their lots to — hmm, that is the question, isn’t it?

With the end of free money is there still a pent-up demand for new cars of any size going to continue? 

Will the IRS tax those who got the $3,500 or $4,500 special payment to buy a new car, it was income?

Will the car gift fairy return and wave the magic Congressional wand for another spate of free money?

Will there be a return of the giant incentives from manufacturers?

What about another round of zero, zero, zero programs?

Who has new, 2010 cars in production that might capture American’s interest in a new car soon?

Or, has the CARS program, while temporarily important, sated the appetite for new cars of those few American’s who need, want and can afford a new vehicle without the bonus of a free money incentive in an economy that has barely started to respond from its semi-comatose state with trillions in financial aid?

And speaking of finances, when will the government kick the golden goose into action to pay dealers who now know what it means to have a severe case of negative cash flow. Could the good news affect of the Cash for Clunkers be diminished by slow pay?

No answers, just questions, lots and lots of questions.

Pebble Beach Concours d’Elegance: Some Old Cars Have Really Big Prices

No government funding, financing or free-bee’s were need at the recently concluded antique-exotic-autos auctions galas on the Monterey Peninsula this year as upwards of $125 million worth of vehicles were sold at auction I was told by McKeel Hagerty, CEO of Hagerty Insurance and his colleague Dave Kinney, Publisher of Hagerty’s Cars That Matter Price Guides. This amount was down slightly from published figures of the 2008 auctions.


Call an End to Clunkers, Dealers Demand

With $3 billion already gone, stop says trade group; DOT Secretary LaHood promises "They'll get their money."

by on Aug.19, 2009

The Cash-for-Clunkers program may have been too successful for its own good, and now dealers want it halted immediately.

The Cash-for-Clunkers program may have been too successful for its own good, and now dealers want it halted immediately.

That didn’t last long.

Despite an infusion of an additional $2 billion in federal funds, on top of the original $1 billion approved by Congress, it appears the unexpectedly popular Cash-for-Clunkers program has again run out of money, says an auto dealer trade group.  As a result, the National Automobile Dealers Association is asking that Washington halt the program immediately.

NADA fears that dealers could wind up being stuck for Clunkers cash they’ve fronted for the program if it turns out more than the total $3 billion has been spent.  Officials from the Department of Transportation have acknowledged they are hugely behind in processing applications for reimbursement by dealers and have so far paid out only around $100 million, leaving many auto retailers strapped for cash.


Cash for Clunkers Working – But at a Price

Carbon dioxide emissions are down as buyers dump guzzlers.

by on Aug.19, 2009

There are plenty of scammers and a few unscrupulous dealers hoping to take advantage of the Cash-for-Clunkers program - at your expense.

As to the longer-term impact, the big question is whether Clunkers will steal future sales. There is a definite pull-ahead of sales, according to CNW data.

The Cash-for-Clunkers program has proven an unexpected success, surprising critics and proponents alike.  But the program has had some unexpected results, so far, while also achieving some of its original goals, says a new survey by CNW Marketing.

It took barely a week for the program, officially known as the Car Allowance Rebate System, or CARS, to burn through the initially-allocated $1 billion, and a second tranche, worth $2 billion in federal funds, is expected to be gone well before the program was originally expected to expire, in November.

That should pull about 750,000 old clunkers off the road.  And, in turn, “It would appear greenhouse gas emissions were cut by more than 90%,” since motorists switched to more fuel-efficient vehicles, said Art Spinella, chief analyst with Oregon-based CNW.

No Trade-in Needed!

No Trade-in Needed!

But that’s assuming the new vehicles would be driven the same amount as the clunkers they replaced, added Spinella, but his survey of C4C buyers shows that, “these new cars and trucks will likely be driven significantly more miles than the clunker, according to owners, and could use nearly 14.6 million gallons of gasoline more than the vehicles they replaced.”


Senate Approves Another $2 bil for Clunkers

Dealers already overloaded by demand.

by on Aug.07, 2009

Dealers will be able to continue take up to 500,000 more trade-ins, now that the Senate has approved another $2 billion for the Cash-for-Clunkers program.

Dealers will be able to continue take up to 500,000 more trade-ins, now that the Senate has approved another $2 billion in Cash-for-Clunkers.

The Senate has approved another $2 billion to replenish the unexpectedly popular Cash-for-Clunkers auto incentive program, which has helped spur strong demand in an otherwise moribund American auto market.

The vote, late Thursday, mirrored action taken by the U.S. House of Representatives, a week ago, and with President Barack Obama’s signature, it means there will be enough money to keep the program, officially known as the Car Allowance Rebate System, going through Labor Day.

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“Now more American consumers will have the chance to purchase newer, more fuel-efficient cars and the American economy will continue to get a much-needed boost,” the president said, following the Senate vote.