Cash for Clunkers Rips Through $3 Billion
The friendly federal program you’ve come to know by its nickname, Cash for Clunkers, is officially defunct as of 8pm this past Monday, August 24th. Designed to get Hummers and SUVs off the road, as well as to jumpstart our failing auto industry, the Car Allowance Rebate System (CARS) program incentivized auto-owners to turn their gas guzzlers in for cash vouchers of up to $4,500 toward more fuel-efficient vehicles.
The $3 billion program was meant to last through November, but as of August 20 (according to a fed press release), more than 457,000 dealer transactions worth $1.9 billion had already been made. Due to such unexpectedly high demand, funding ran out way ahead of schedule. Just last Thursday, it was decided that the program would shut its gates three months early.
Sarah Webster, automotive editor for the Detroit Free Press, noted in a report from NPR’s Tell Me More that unfortunately, much of the consumer cash spent through CARS went to foreign auto makers. Each of the top ten vehicles turned in through the program were domestics (Chrysler, GM, Ford), said Webster, but only 41% of the market share under the program went back to the three American auto giants.
Still, Webster said, CARS was a wild success in that it filled auto showrooms for the first time since the recession hit. Some laid-off factory workers have even been called back in to help meet new demand.
If you didn’t make it in with your SUV for last call this weekend, you’re out of luck on the auto front for the moment. At least until the Efficient Vehicle Leadership Act (EVLA) recently introduced by Senators Jeff Bingaman (D-N.M.), John Kerry (D-Mass.), Dick Lugar (R-Ind.), and Olympia Snowe (R-Maine) instates a permanent tax rebate program for fuel-efficient vehicles. The legislation was inspired by the success of Cash for Clunkers. While EVLA slogs its way through red tape, feel free to downsize and get that SUV off your hands, but forget about a government handout.
On the bright side though, you’ve got an incentive program very similar to CARS to look forward to, if you’re in the market for a new washing machine or fridge. Energy Secretary Steven Chu announced just as CARS was wrapping up that later this autumn the Fed will begin incentivizing consumers to switch to energy efficient home appliances. A $300 million stimulus package will be parceled out in rebates of $50 to $200 – an effort not only to cut energy use, but also to revive down-in-the-dumps companies like Whirlpool and Electrolux.