NEW YORK (CNNMoney.com) - After sparking an initial rush to showrooms, the Cash for Clunkers program seems to be running out of fuel.
Interest in Cash for Clunkers has fallen 15% since its peak, and car purchase intent could fall to pre-Clunkers levels by next week, an auto research group said Tuesday.
Under the Clunkers program, which launched July 27, vehicles purchased after July 1 are eligible for refund vouchers worth $3,500 to $4,500 on traded-in cars with a fuel economy rating of 18 miles per gallon or less.
The program proved wildly popular, running through its initial $1 billion in its first week and leading lawmakers to approve an additional $2 billion in funding on August 7.
But interest in the program peaked on July 29, and demand has waned, according to the report from Edmunds.com.
The report, which cited Internet shopping data, said if current trends continue auto purchase intent will fall back to pre-Cash for Clunker levels by August 20.
The original money set aside for Clunkers "was very low in relation to the size of the auto market," said Michelle Krebs, senior analyst at Edmunds.com, in a prepared statement. "This created a Gold Rush mentality where consumers hurried to take advantage before funding ran out."
The additional $2 billion in funding removed the urgency to participate, Krebs said.
Still, the report predicted auto sales will improve over the summer as customers bargain-hunt before new models hit the showroom.
"The real risk is this fall," said Jessica Caldwell, a director at Edmunds.com, adding that that economy will have to "have picked up to keep sales at current levels. "
what a waste of tax payer dollars.......
another bozo government program that is going bust...march on socialists
How many car-manufactoring jobs have been saved by this ill-conceived government give-away??
We would have been BETTER to give the $3 Billion back to the people who PAY TAXES.
Demand is waning? How about we wait for folks to get back from vacations, for them to send their kids off to school, for the dealers to re-stock.
Especially that re-stocking: Dealers are saying their most popular cars are gone, that their lots are practically empty. What are people supposed to buy right now-other clunkers??
CNN, give me a break here-watch your logic, and read your other news items before publishing something potentially misleading like this tripe.
my car gets 19 miles to the gallon, a 1992 camero. i do not qualify. Why does my tax money go to some other person when i could use it. give me more of my money back an i will take care of myself. i guess if i was a minority or an illegal i could get a new car
Any stimulus plan must have three things:
It must be timely, temporary,and targeted. OKAY?
All this was just a temporary re-inflation of the bubble that popped last fall. That is the only thing this government is doing right now: trying to keep the bubble inflated instead of fixing the cause of the bubble in the first place.
I'm sure the biggest reason why use of the program has slowed is because there isn't so much unrgency now that it;s been funded more. Hopefully some of these people will actually take the time to determine if it's worth getting further in debt. I know it isnt worth it to me.
This program worked well? ...that's a laugh! It's the taxpayers paying for other people to buy a car! The mileage requirement, >4mpg, is a joke, and the amount of money thrown around is ridiculous! This program, whether it was replenished or not with another 2bil, is typical of the tax and spend mindset...where'd the government get the money? From China...who'd you give it to? Japan...whose paying the interest on every $4500 check? We are...who got the cars? Someone else, who probably has no business buying a car...impulse buyers........and the media makes OBama look like a hero for raising our taxes, and giving our tax money out like candy to buy new cars....finally, the average car payment is $275-350...if you owned a clunker, you'd have spent that money around town, spreading it across the economy. Getting locked into a payment for a single source, eliminates that spending...and with a troubled job market, the last thing someone should have is a car note...shows again, the fiscal irresponsibility of the Obama administration...
Cash for clunkers is a waste of my tax money. Many of the clunkers I see traded in are better than what I drive (even though despite being 21 years old, the car gets good gas mileage). However, smashing later model cars when someone less fortuante could make good use of them is obscene. On the flip side, I see true clunkers that look like they were pulled from the junk yard traded; and you can't tell me that someone who drove that can even qualify for a loan. The program is being abused by dishonest "clunker" owners trading their old beat up hunting truck instead of what they really drove every day.
Also, how many people who could not really afford a car payment just lost their PAID FOR vehicle and exchanged it for years of debt that they may not be able to manage? How many repossessions will occur as a result? Then where will those people be? In much worse shape and WALKING!
Interest in it hasn't wained but the amount of red tape involved is slowing it to a snails pace, and the fact that the goverment has yet to reimburse any dealers yet for the clunkers is causing cash flow problems for a lot of them already. If uhbama wants to put some more people out of business he's well on his way. He will make a great used car salesman someday, scratch that its unfair to used car salesmen.
well, if you read the fine print on cars.gov, it states that the federal government now owns your computer and can access any files or information that has been sent or received to that computer. No wonder its failing, people are realizing what the scam is all about.
Another tax will pay back for supporting Obummer Motors.
My complaint is the hard line at 18 mpg. I think it should be graduated so that people like me who have an old car that is over 18 mpg, might have an incentive to purchase a new one. It is a bit unfair that those who have old gas GUZZLERS get a bonus that those of us who have old gas guzzlers. If I could get 2500 – 3000 bonus, I'd probably scrap my 1992 Ford Taurus.
"another bozo government program that is going bust…march on socialists"
Thank you for making my point: a program that has widely been considered a huge success is likely winding down because, well, if 100 people were interested and 99 have participated, then demand is down to 1. There was no way of knowing what that unmber would be in place of 100. Thanks for playing tho...we're all incredibly amused by the GOP's neverending quest to slander everything and thereby commit political hare kari.