Arkansans add $23.4 million in Cash for Clunker sales; Edmunds critical of program (Updated)

Arkansas consumers pushed more than $23.4 million in Cash for Clunker applications, or just 0.8% of the total $2.87 billion reported Wednesday (Aug. 26) by the U.S. Department of Transportation.

Oklahomans generated $37.42 million in Cash for Clunkers applications.

U.S. Transportation Secretary Ray LaHood said in the department’s statement that the program — which was halted Tuesday, earlier than planned — was a success with 690,114 applications submitted for a value of $2.877 billion. Congress had allocated $3 billion for the program designed to pull low-gas mileage cars off the road by providing tax rebates up to $4,500 for new cars that get better gas mileage.

“American consumers and workers were the clear winners thanks to the cash for clunkers program,” U.S. Transportation Secretary Ray LaHood said in the statement. “Manufacturing plants have added shifts and recalled workers. Moribund showrooms were brought back to life and consumers bought fuel efficient cars that will save them money and improve the environment.”

However, Edmunds.com, considered the premier non-automaker authority on the auto industry, suggested the Cash for Clunkers program will create a “hangover” in the auto sales market.

“Cash for Clunkers distorted the market in a way that benefited the industry for four weeks. Now the payback begins.” Edmunds.com CEO Jeremy Anwyl said in a statement. “Sales were stimulated at the start of the year’s prime buying season, just when they were building on their own. People rushed into purchases that many would otherwise have made later this year. The result will be lower sales in the weeks to come.”

Edmunds reports that consumer “purchase intent” is down 50% from the Cash for Clunkers peak, and down 11% from the June average.

“The ‘Cash for Clunkers’ party is over, and now the auto industry is likely to experience a painful hangover,” Edmunds.com noted in the statement.

Updated info: John Robben, general manager for Fort Smith-based Smith Automotive Group, does not think the Cash for Clunkers program will result in decreased future sales.

“It was an extremely good program for us on the selling side. it brought a lot of people, who appeared to us to be were not going to trade, but the incentive was very good and it enticed them to bring their older vehicle in and trade for a new one,” Robben said. “It’s certainly been good for the consumers, it’s been good for the dealers and it’s been good for the economy.”

Federal officials maintain the impact from Cash for Clunkers will be good for the environment. They note that 84% of consumers traded in trucks and 59% bought cars. The average fuel economy of the vehicles traded in was 15.8 miles per gallon and the average fuel economy of vehicles purchased is 24.9 mpg, according to the DOT statement.

The DOT released several categorical rankings, including the following.
Top 10 New Vehicles Purchased
1. Toyota Corolla
Honda Civic
Toyota Camry
Ford Focus FWD
Hyundai Elantra
Nissan Versa
Toyota Prius
Honda Accord
Honda Fit
10. Ford Escape FWD

Top 10 Trade-in Vehicles
1. Ford Explorer 4WD
Ford F150 Pickup 2WD
Jeep Grand Cherokee 4WD
Ford Explorer 2WD
Dodge Caravan/Grand Caravan 2WD
Jeep Cherokee 4WD
Chevrolet Blazer 4WD
Chevrolet C1500 Pickup 2WD
Ford F150 Pickup 4WD
10. Ford Windstar FWD Van

Average Fuel Economy
New vehicles Mileage: 24.9 MPG
Trade-in Mileage: 15.8 MPG
Overall increase: 9.2 MPG, or a 58% improvement

Top 5 states in terms of Cash for Clunkers applications
California: $326.82 million
Texas: $183.77 million
New York: $156.29 million
Florida: $146.56 million
Illinois: $143.61 million