While the Toyota Corolla was the vehicle most commonly purchased under the program, General Motors was the manufacturer with the highest percentage of vehicles purchased at 18.7 percent, according to the NHTSA data. General Motors, Ford and Chrysler vehicles represented about 45 percent of the new vehicle sales under "cash for clunkers," which is about the same as their share in new vehicle sales overall.
The NHTSA data also shows that 83 percent of the trade-ins were trucks while 59 percent of the new vehicles purchased thus far were cars, representing 9.6 miles per gallon, or a 61 percent improvement in fuel economy. "All buyers, regardless of trade-in, are opting for smaller, more fuel-efficient cars at a higher than usual rate," says Michelle Krebs, senior editor with Edmunds.com's AutoObserver.com.
This trend is unlikely to continue at the same rate, according to Paul Taylor, the NADA's chief economist. "Supply of these small cars is dwindling as they get purchased with the demand CARS has created, so new participants in the program are likely to end up purchasing vehicles that are slightly larger and somewhat less fuel efficient as a result," he says.
Indeed, preliminary inventory reports by the Automotive News Data Center indicate that the number of unsold new vehicles across the country had fallen below 2 million units --the lowest figure since at least 1992 when the group started tracking this number.
Because it takes automakers at least a month to replenish dealer inventory when it drops unexpectedly, new-car buyers shopping this month will have less of a selection on dealer lots. Still, NHTSA is projecting that the new funds will be depleted by Labor Day, so waiting to make a purchase may not be an option. The result is that consumers who want the CARS credit may end up making a deal but waiting for the car of their choice to arrive in a future shipment or settling on another model.
In addition to its environmental benefits of replacing old gas guzzlers with new, more fuel-efficient vehicles, the CARS program also seems to be helping consumers directly in their wallets. By driving more fuel-efficient vehicles, consumers will save money on gas at every fill up. In addition, an Edmunds.com analysis indicates that the value of the trade-ins is $1,475 on average, allowing consumers to more than double or even triple their trade-in depending on whether they qualified for the $3,500 or $4,500 CARS credit.
Many dealers also are reporting that consumers who have older vehicles that do not qualify as a clunker under the program are buying cars anyway. A Kelley Blue Book Market Intelligence Study on the CARS program found that 10 percent of new vehicle shoppers are likely to purchase a car sooner because of the program. Earnhardt Ford/Mazda has sold 55 vehicles under the program, as well as making 10 additional sales to consumers whose vehicles did not qualify but chose to make a purchase anyway.
How much the program has actually resulted in boosting new car sales remains to be seen. Summer is traditionally a time when automakers work hard to sell cars by making deals to get rid of their inventory to make room for the new model year, which arrives in early fall. Edmunds.com Chief Executive Jeremy Anwyl says, "This program would have made more sense to continue in October when the traditional summer selling season is over."
The CARS program will end Nov. 1, 2009 or when the allocation runs out, whichever comes first. Updates on the program as well as more details can be found at Cars.gov or by calling (866)227-7891.
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