The government’s “cash for clunkers” program has proven so popular with drivers that it pushed car sales up in July, with Ford becoming the first major auto maker to report the first year-over-year increase in 11 months. For Ford, it was the first sales rise in two years!
“I challenge anyone to show me a one-week program that has had as much benefit to the consumer and as much impact on the environment as this one has,” George Pipas, Ford’s chief sales analyst, said on a conference call Monday, according to the NY Times.
Consumers were so enamored with the program that it ran out of money last week. Although the House voted Friday to add $2 billion to continue the program, the Senate has yet to act.
Meanwhile, the money did achieve what it set out to do — stimulate sales and pull old fuel inefficient cars off the road. Any car built after 1984 that gets less than 18 mpg is eligible, although the amount received depends on the fuel efficiency of the new car purchased.
This program shows there is pent up demand. Consumers just need a good reason — like a sale, a good value, a lower gasoline bill or all three — to part with their cash horde. Makes one wonder if the cash will start flowing quickly once the recession recedes.