The popular Cash for Clunkers program (aka CARS, or Car Allowance Rebate System) ended on Monday night. With nearly 700,000 clunkers taken off the road, the program could be called the most impactful automotive sale of all time. Rebate applications worth $2.877 billion were submitted, just under the $3 billion provided by Congress to run the program.
The Department of Transportation recently released statistics about Cash For Clunkers, showing which segments of the market saw the greatest interest:
- Total Dealer Transactions: 690,114
- $ Value of Submitted Dealer Transactions: $2,877,900
- Top Vehicle Purchased: Toyota Corolla
- Top Trade-In Vehicle: Ford Explorer
- Top New Manufacturer Purchased: Toyota
- New-Vehicle Mileage: 24.9 MPG
- Trade-In Mileage: 15.8 MPG (Overall increase of 9.2 MPG, or 58% improvement)
Top 10 New Vehicles Purchased During Cash for Clunkers
But beyond the raw stats, who truly benefited from the program? Here's our take on the winners and losers from Cash for Clunkers:
Consumers: Up to $4500 discounts for nearly every manufacturer? A cash-on-the-hood deal like that doesn't come along too often. Athough many manufacturers offer rebates that are into the thousands, we've never seen such an industry-wide sale.
Manufacturers of Small Cars: Some people find ire in the fact that the top manufacturer on the Cash for Clunkers list is Toyota (and its Corolla small sedan was the top seller during the program), but that shouldn't be too much of a surprise. Since Cash for Clunkers gave consumers the highest reward for buying a fuel-efficient vehicle, those buying patterns followed the reality of the market: Asian manufacturers largely dominate in small cars.
Ford: Whereas two or three years ago nobody ever would have considered Ford to be in a leadership position amongst the Big 3, the Blue Oval found its stride in 2009. When Cash for Clunkers first opened up, Ford shot to the top of the sales charts. While it lost the number one slot to Toyota, its Escape was the only SUV in the entire top 10 -- a remarkable feat.
Top 10 Trade-In Vehicles During Cash for Clunkers
The 1990s: Do you remember those 90s glory days? Car makers surely do, when SUVs and trucks moved from utility vehicles to image statements. Along with that shift (something that nearly all manufacturers, not just the domestics, happily accepted) came fatter profit margins. Even those who never left the confines of the suburban jungle were buying 4x4s; the 1990s were as much about what was possible than anything. But what happened during Cash for Clunkers? A whole lot of people gave that dream up: the Ford Explorer, perhaps the first of the iconic SUVs, was the top trade-in vehicle. The entire decade went the way of the crusher.
The Government: Do you know why the Cash for Clunkers deadline was pushed back two times? It wasn't so consumers could take advantage of the program any longer; it was so dealers could submit their claim forms on the government's infamous rebate website. Dealers reported the website crashed numerous times during the month-long program, with many worrying they would never get their rebates submitted. From an organization standpoint, Cash For Clunkers was an administrative mess. "The most ironic thing happened during Cash for Clunkers," IHS Global Insight's John Wolkonowicz said. "GM and Chrysler -- who were in bankruptcy as of a few months ago -- had to give loans to the dealers to keep the dealers solvent because the government wasn't paying up in time. In fact, a large dealer in the Boston area was owed $2M by the government on Cash for Clunkers as of Monday and had not collected a single cent."
Charity Donation Programs: For many local charities, "clunkers" serve a different purpose. Many offer a tax rebate to those who donate their old cars, in turn providing those used cars to families without the means to purchase a new car. During the Cash for Clunkers program, many charities reported that their car donations plummeted, creating a shortfall that not only affected the charity itself but those families who could have benefited from an inexpensive vehicle.
Motorcycle Manufacturers: When Cash for Clunkers sprouted forth in the early summer, the plan included rebates for the purchase of motorcycles. Unfortunately, that part of the plan fell through when it eventually passed through Congress. As many a bike rider will tell you, the two-wheeled wonders are incredibly efficient, with miles-per-gallon ratings that far exceed any car on the road today. Why wouldn't they be included if the program was intended to reward those who lowered their carbon footprint?
What did you think about Cash for Clunkers? Did you participate? Leave your comment below and let us know.