U.S. Cash-for-Clunkers program ends with jumping sales

CHICAGO, Aug. 24 (Xinhua) -- The popular Cash-for-Clunkers program, which has generated sales of nearly 490,000 vehicles in the U.S., worth more than 2 billion dollars, ended Monday night after a wildly successful run.

Car sales in July were the highest since August 2008 and up 13 percent over June.

Operation manager Abel Rivera matches keys with clunker vehicles traded in by customers during the last day of the "Cash For Clunkers" auto rebate program at Courtesy Chevrolet dealership in Phoenix, Arizona August 24, 2009. Americans swamped auto dealerships on Monday during the final hours of the U.S. government's popular "cash-for-clunkers" program, offering rebates of up to $4,500 to trade in older gas guzzlers.(Xinhua/Reuters Photo)

"This program has been a lifeline to the automobile industry, jump starting a major sector of the economy and putting people back to work," Transportation Secretary Ray LaHood said while announcing the deadline of the program at local time 8 p.m. on Monday (0000 GMT Tuesday).

"At the same time, we've been able to take old, polluting cars off the road and help consumers purchase fuel-efficient vehicles," he added.

Sean Kastrati, a car manager at Grossinger Toyota dealership in Chicago Lincolnwood, told Xinhua that the sales generated by the program have wiped out their inventory completely.

"We sold a total of 210 cars under this program," Kastrati said. "We wish it could go on longer and the government could do it again in the future. Now we are waiting for more cars to come in so that we can start selling again."

Lawrence A. Freeman, President and CEO of Global Business Consultants, told Xinhua that no one ever expected the program to be so popular.

Erlinda Sandoval goes over paperwork for her 1998 Dodge Caravan trade-in with salesman Blake Greenberg (R) during the last day of the "cash-for-clunkers" auto rebate program at the Courtesy Chevrolet dealership in Phoenix, Arizona August 24, 2009. Americans swamped auto dealerships on Monday during the final hours of the U.S. government's popular "cash-for-clunkers" program, offering rebates of up to $4,500 to trade in older gas guzzlers.(Xinhua/Reuters Photo)

"Regretfully, the legislation is tipped too much in favor of selling trucks and SUVs and not enough towards making an improvement in the fuel efficiency of the U.S. manufactured automobiles," Freeman said.

The program has motivated many consumers to open up their wallets.

John Gill, a consumer from Tennessee, said he had a very positive experience and felt fortunate that he had an old clunker that qualified.

"I think this was a once-in-a-lifetime deal for a new car," he said. "I am very pleased."

The higher sales generated by the Cash-for-Clunkers program are also spurring auto production in the United States.

General Motors said last week that it plans to boost production at several of its factories, bringing back about 1,350 laid-off workers in the United States and Canada.

Ted Ying, an auto industry veteran with more than 10 years' experience at Ford Motor Company, told Xinhua that the program definitely helped stimulate auto sales and benefited both the economy and customers.

Clunker vehicles sit in a parking lot during the last day of the "Cash For Clunkers" auto rebate program at Courtesy Chevrolet dealership in Phoenix, Arizona August 24, 2009. Americans swamped auto dealerships on Monday during the final hours of the U.S. government's popular "cash-for-clunkers" program, offering rebates of up to $4,500 to trade in older gas guzzlers.(Xinhua/Reuters Photo)

However, Ying added that the program helped Japanese automakers sell more cars than U.S. ones, who were not necessarily the greatest beneficiaries.

Toyota Corolla, a small and fuel-efficient vehicle, is the top seller under the program. Toyota vehicles accounted for 19.2 percent of the 489,269 sales, while General Motors came in second at 17.7 percent, according to government data.

Eight of the ten top-selling vehicles are foreign-made cars, while U.S. cars occupied all top 10 spots on the trade-in list.

Despite the program's popularity, it has its critics.

"We are taking it from other consumers and reducing demand for all the other goods in the economy and transferring it to those who take advantage of the program," said Jeffery Miron, a Harvard economics professor.

Under the program, which was signed into law by U.S. President Barack Obama on June 24, vehicles purchased after July 1 are eligible for refund vouchers worth 3,500 dollars to 4,500 dollars on traded-in cars with a fuel economy rating of 18 miles per gallon or less.

Earlier this month, Obama signed into law a 2-billion-dollar expansion of the program after the first 1 billion dollars ran out in the first days of the program.

The government decided to end the program as high demand from consumers threatened to outstrip the funding.

People walk by cars turned in as part of the "Cash For Clunkers" auto rebates program outside a Hyundai dealership in New York August 24, 2009. (Xinhua/Reuters Photo)

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A car turned in as part of the "Cash For Clunkers" auto rebates program sits outside a Hyundai dealership in New York August 24, 2009. (Xinhua/Reuters Photo)