The Obama administration will tow the “cash for clunkers” program to the junkyard Monday, closing the book on the $3 billion program that convinced hundreds of thousands of anxious consumers to buy new cars.
The program is considered one of the most successful pieces of President Barack Obama’s economic stimulus plan, and traffic in dealer showrooms is likely to be heavy leading up to Monday’s deadline.
“One thing is certain — it motivated hundreds of thousands of consumers to buy new vehicles,” said Jack Nerad, executive editorial director at Kelley Blue Book, which tracks car sales. “Whether it boosts the overall economy for any length of time remains to be seen, but it does demonstrate that a direct stimulus to consumers can quickly generate substantial economic activity.”
JD Power and Associates estimates retail auto sales will top 1 million in August, the first monthly increase since June 2007, largely as a result of “cash for clunkers.” And IHS Global Insight, a consulting firm that tracks the economy, expects overall U.S. retail sales will show a 2.2 percent gain this quarter because of higher car and truck sales.
Vehicle demand has been so strong that automakers including General Motors Co., Ford Motor Co. and Chrysler Group LLC boosted production.
U.S. Transportation Secretary Ray LaHood said Thursday the cutoff day for the clunkers program was determined by using conservative sales estimates to ensure that there is enough incentive money left to cover the expected final sales rush.