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Published: 8/27/2009

U.S. to give $2.87B in rebate cash for clunkers

BY JON CHAVEZ
BLADE BUSINESS WRITER

Ohioans claimed $136 million in government rebates under the just-ended "cash for clunkers" program, and Michigan residents $132 million, the U.S. Department of Transportation said. In all, the program issued $2.87 billion in rebates for 690,114 new cars, the government said yesterday.

States claiming the highest amounts of rebates were California, at $327 million; Texas, New York, Florida, Illinois, and Pennsylvania. Ohio and Michigan were next highest. Lowest was Wyoming, at $2.5 million.

"Cash for clunkers" allowed people to trade in eligible older vehicles with poor mileage for new vehicles with good fuel-efficiency and get $3,500 to $4,500 in rebates from the government.

As part of President Obama's economic stimulus program, "cash for clunkers" substantially boosted car sales nationwide for 33 days, until it ended Monday night. It also prompted automakers to ramp up vehicle production.

Rob Brown, head of Brown Automotive Group in Toledo, agreed the program was an overwhelming success, and not just for dealers. "Look at the money the states have put back in their coffers due to sale tax collection on new vehicles," he said. "Yes, the dealers will make additional profits, but a lot of other people will be helped. Even the area junkyards will make money off of this."

Edmunds.com, an auto consumer Web site, estimated that the dealers' average transaction price increased as did the dealer-profit margin, going from $1,129 the first week and ending at $1,342.

Edmunds, which calculates car sales differently than the Transportation Department, said the top five vehicles purchased under the program were the Ford Escape and Focus, Honda Civic, Jeep Patriot, and Dodge Caliber.

The Transportation Department said the top five purchased were the Toyota Corolla, the Honda Civic, the Toyota Camry, the Ford Focus, and the Hyundai Elantra.

The government counted vehicles with different transmissions separately, whereas Edmunds added those together for the same vehicle model.

Edmunds said the top traded-in clunkers were the Ford Explorer and

F-150 pickup, Jeep Grand Cherokee and Cherokee, and the Chevrolet Blazer. The government said the top trade-ins were the Ford Explorer 4WD, Ford F-150, Jeep Grand Cherokee, Ford Explorer 2WD, and Dodge Caravan/Grand Caravan.

Mr. Brown said the program got rid of some fuel- inefficient vehicles.

"If you looked at the people that originally came in, the first ones, they were not going to be in the market for new cars for three to six years, he said. "Their cars were pretty old."

Latter buyers probably would have bought new cars in the next two or three years, but the program's incentives sped up the purchases, he said. "So it got a lot of the pent-up demand moving," he said.

- Jon Chavez



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