US Optimistic About 'Cash for Clunkers' Program
August 26, 2009
Top U.S. officials are optimistic the so-called "Cash for Clunkers" program has given the auto industry, and the country's economy, a needed boost.
The Transportation Department Wednesday said the nearly month-long program, which ended Monday, resulted in sales of 700,000 new, more fuel-efficient vehicles. As a result, officials say, the country created or saved 42,000 jobs, and that the impact should boost economic growth for the remainder of the year.
The government says it handed out $2.9 billion under the program, which offered rebates of up to $4,500 to drivers who traded in their old vehicles, or 'clunkers,' for new, more fuel-efficient models.
The most popular new cars included small cars from Toyota, Honda and Ford, all made in the United States.
U.S. Transportation Secretary Ray LaHood called Cash for Clunkers "one of the best economic news stories" the country has seen.
U.S. auto giants General Motors and Ford both announced they were boosting production because of the program.
Officials also say that in addition to sparking the auto industry, Cash for Clunkers will help the environment. They say the average fuel economy of the new vehicles bought through the program is 58 percent better than the vehicles they replace.
However the Edmunds.com Web site, which covers the automotive industry closely, says a "steep decline" is likely to hit auto sales now that the incentive program is over.
'Cash for Clunkers' was based on similar incentive programs offered by other countries to help their struggling auto industries.
A similar program in Germany, in April, got more than one million applications.
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