Thursday, July 30, 2009

Government To Suspend Cash For Clunkers

This is hot off the news....the government plans to suspend temporarily the Cash For Clunkers Program. The program offers $3500 to $4500 for trading in an older vehicle for a new more fuel efficient vehicle. The plan does require that only certain vehicles qualify for the program.

Apparently, it is so popular that they are concerned about exceeding the $1 billion dollars earmarked for the project. The plan would have applied to approximately 250,000 vehicles.
Thru Wednesday 22,782 vehicles had been purchased thru the program.....with an estimated 25,000 deals had not yet been approved by the National Highway Transportation Safety Agency.

Members of congress from the auto producing states have approached the congressional leaders about extending the program. Rep. Candice Miller, R-Michigan indicated that "This is simple the most stimulative $1 billion the federal government has spend during the entire economic downturn".


As I outlined in my previous post this could be a great program for the auto manufacturers, dealers and the consumers that were able to take advantage of the program. Last month, over 850,000 cars were sold for the month. This program would apply to about ten percent of the sales over the three months of the program.

So, the government was serious about stimulating auto sales they would substantially increase the program. The small amount of one billion dollars is going to increase sales temporarily but will have no impact in the long term.

Update: The House of Representatives have approved an additional $2 billion in funding on July 31st to continue program. But, the Senate is holding back approval. The continuation of the program depends on that vote.


  1. Hello Peter,

    You are on the cutting edge with these things. Thank you for keeping us up to date on things like this. Like you this will not help much for the long run. Knowing the government this is only the first step in these kinds of things. Maybe not for the good of the country.

    Thank you for keeping us up to date.

    Dan and Deanna "Marketing Unscrambled"

  2. Hi Pete .. can't remember where we are here .. but one dealership .. Caffyns (Ford, Daewoo, etc) .. I see is advertising more on top of the Govt scheme .. not sure what.

    As you say it's only temporary while things (theoretically?!) sort themselves out ..

    Looks a magic waste dump!
    Hilary Melton-Butcher
    Positive Letters

  3. Hi Pete
    It is great to know the plan did help more new being sold. I hope the government will be more plan to help.
    Thanks for sharing.
    Giovanna Garcia
    Impecfect Action is better than No Action

  4. Hi Dan & Deanna,

    Thank you for your support! I will try to keep up with the latest and greatest vehicles!

    I will have to admit that I have been very skeptical of many of things that the government has done! Much of what they have done is the wrong way to go!

    Let's hope for the best! Thank you for your comment!

    Pete Baca
    The Car Enthusiast Online

  5. Hi Hilary,

    I know that the cash for clunkers program has been a hot issue for British politicians. It does not appear that the American version will be much different!

    I will keep you appraised how this works out!
    Thanks for your comment!

    Pete Baca
    The Car Enthusiast Online

  6. Hi Giovanna,

    Yes, the plan was a blockbuster hit! Unfortunately, they did not fund it well enough to be highly effective.

    Today, they increased the limit to $3 billion dollars so the program will go on! Thanks for your comment!

    Pete Baca
    The Car Enthusiast Online

  7. Hi Pete,
    I think the government needs to be in this program for the long haul. Other wise you are just putting a bandage on the wound. I agree with your cutting edge summary. Thanks for the interesting information.
    Dr. Bob Moulas

  8. Hi Dr. Bob,

    It amazes me sometimes what an inept government we have! They came in with a burocratic nightmare of regulations to implement the program. That made it extremely difficult for the people to understand, then the dealers to implement.

    For the finally, they substantially underfund it! Thanks for the comment!

    Pete Baca
    The Car Enthusiast Online