Today, President Obama signed into law legislation the House passed last week to extend the highly successful Cash For Clunkers initiative with an additional $2 billion in funding. Recent reports on the more than 200,000 Cash for Clunkers purchases so far show:
The average fuel economy of new vehicles purchased under the program is 25.4 mpg, and the average fuel economy of trade-ins is 15.8 mpg. The average increase in fuel economy is 9.6 MPG, or a 61% improvement. This will result in annual consumer savings of $700-$1000 in gas prices.
83% of trade-ins under the program are trucks, and 59% of new vehicle purchases are cars. Cars purchased under the program are, on average, 21% above the average fuel economy of all new cars currently available, and 63% above the average fuel economy of cars that were traded in.
In July, Ford's hybrid vehicles (Fusion, Milan, Escape and Mariner) posted combined sales of 5,353, a record for any month and up 323% versus a year ago.
During the week that the 'Cash for Clunkers' program was launched, GM's small car sales increased 54.8% over the preceding week. GM Compact car sales were up 36.9% during the same period. Specifically, the Chevy Aveo — one of GM's most fuel-efficient vehicles at 30 mpg (EPA) — saw a sales increase of 58.9% during the week that the CARS program was launched.
The economic up-side doesn't end in the auto industry:
Companies that produce sodium silicate, the substance used to 'kill' the clunkers, are experiencing record sales.
Sirius XM stock value has experienced a surge because its units are getting installed in the new vehicles
Some economists see more major impacts: “The blowout response to the cash-for-clunkers incentive program has been far stronger than we expected,” wrote Morgan Stanley economist Richard Berner in a note Monday. He now thinks GDP will grow 3% to 4%, up from his firm’s earlier forecast of 1%.”
Steel demand is beginning to pick up again after eight months and should benefit from the “Cash for Clunkers” auto rebate program, the chief executive of steelmaker Nucor Corp (NUE.N) said on Wednesday.
Today, by signing the Cash for Clunkers legislation that passed the House and Senate, President Obama joined Congress in providing needed assistance to consumers, dealers, and the auto industry in general, while preserving our planet.
The Cash for Clunkers initiative has been successful beyond our wildest dreams. Already, from coast to coast, families have traded in their old gas-guzzlers for new, more fuel-efficient vehicles, many of which were made right here in the United States. Now, many more Americans will have the opportunity to do so.
I commend the Senate for joining the House in taking swift action, and President Obama for signing into law a measure that will help our economy and reduce our dependence on oil.