The federal program provided rebates of $3,500 or $4,500 to consumers who traded in vehicles with combined city/highway mileage of 18 miles per gallon or less and bought more fuel-efficient new cars or trucks.
The program was designed to run until Nov. 1 or until 250,000 cars had been sold, whichever came first. Many analysts had expected the money to last at least until Labor Day.
..."I hope they will extend the program because it was such a win on so many levels -- for the consumers, for the environment, for all the car manufacturers," said John Sackrison, executive director of the Orange County Automobile Dealers Assn. "It got a lot of people to go car shopping who wouldn't have otherwise."
...Dealers and automakers said the plan clearly sparked a level of interest that had been missing in new-car showrooms, which have looked like ghost towns for much of the last year [Martin Zimmerman, Tiffany Hsu, and Jim Puzzanghera, "'Cash for Clunkers' Program Runs out of Gas," Los Angeles Times, 2009.07.31].
Now it's possible we might have just gotten lucky: car sales had been so slow for so long, there was nowhere for them to go but up. The incentive program may just have coincided with an upturn that would have happened anyway. And I still hesitate to cheer about government programs that encourage people to buy more stuff.
But if we need people to buy stuff to get us out of the recession, we can at least aim at getting people to buy something useful, like cars that get better gas mileage. It looks like Cash for Clunkers is one government stimulus program that's hitting on all cylinders.