While there may be debate concerning the necessity and efficiency of the government's Cash for Clunkers campaign, there is one group enjoying its benefits. Car salesman are reaping the financial rewards of a run on car dealerships. The same people who were recently struggling to feed their families are now running around car lots completing deals and meeting massive demand. While the program has been an incredible shot in the arm for car sales, is it what the economy needs and will it continue to benefit those in the market for a new vehicle?
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Cash for Clunkers began with a $1 billion budget. Those shopping for
new cars were encouraged to bring in their older, "
gas guzzling" vehicles in exchange for a hefty rebate on a new, more
fuel efficient vehicle. The government's last minute changes to the list of qualifying vehicles on the
Cash for Clunkers car list created a great deal of confusion. The popular car website Edmunds.com had printed a list of eligible cars on the list. It found out later from visitors posting to their message board that the list had been changed at the last minute by the government, based on updated EPA regulations. The EPA determined that certain trade ins that had previously qualified for trade ins, and cars that qualified as replacement vehicles, were not ineligible.
The program allows cars that have a combined highway-city mileage of 18 miles or less per gallon to be traded in for cash toward a car that is capable of 22 mpg or more. The programs was originally intended to last until November 1st or until the $1 billion ran out. The budget was exhausted in six days, leaving the government scrambling to extend the program. People that had deals in the works and had claimed their
Cash for Clunkers vouchers were left wondering if their rebate would be eligible. In many cases, the rebate was the difference in their ability to buy a car or not.
Edmunds also warns that just because you have a qualifiying car does not mean you should rush off to the dealership. It is important to understand whether you are truly getting a good deal. If the trade in value of the
Cars for Clunkers car list is less than the
blue book value of your car, it is best to wait.
An additional concern for the program facing the car industry is low stock. The program has been so popular, many lots are looking empty these days. Under the recent economic circumstances, this is a good problem to have. The dealerships are restocking as quickly as possible and hope to be able to take advantage of the success of program, particularly with an extension and additional money in the program's budget. The small cars that had not been selling are now flying off the lots. According to USAToday.com, the list of hot sellers on the
Cash for Clunkers car list is as follows:
- Ford Focus
- Toyota Corolla
- Honda Civic
- Toyota Prius
- Toyota Camry
- Ford Escape
- Hyundai Elantra
- Dodge Caliber
- Honda Fit
- Chevrolet Cobalt
Initial evaluations of the program is it has been a massive success. Those with complaints are concerned that the program is another instance of government overspending with money they do not have. The budget extension of $2 billion was borrowed from another part of the stimulus bill. Chances are, if this were the only program designed for the purpose of boosting the economy, it would be more widely accepted. There are direct benefits for citizens. The purpose of the program may have been environmental but has proven that it has the ability to get money into the pockets of Americans. Recent massive government spending has the public jaded, and the response to a successful program may be skewed. But speak to any car sales person whose paycheck has been fattened by the Cash for Clunkers program and they will sing its praises.