By on August 26, 2009

The Freep reports that final cash for clunker numbers show the program coming in under its $3bn budget. $2.877bn was spent on 690,114 deals, according to government data. The bad news? C4C did a mediocre job stimulating the domestic firms; according to the Detroit News. GM, Ford and Chrysler captured just 38.6 percent of all clunker sales, down considerably from their joint 45 percent market share in July. Toyota captured 19.4 percent, GM snagged 17.6 percent, while Ford only ended up with only 14.4 percent—just ahead of Honda which had 13 percent. Check out the NHTSA’s PDF postmortem press release on the program here. Though the Detroit Three didn’t do so well in the “cash” portion of cash for clunkers, it swept the clunker list. Ford alone had five of the top ten clunker trade-ins, with GM and Chrysler rounding out the list. Hit the jump for top ten buys and trade-ins by model.

Top-Selling C4C Models

1. Toyota Corolla

2. Honda Civic

3. Toyota Camry

4. Ford Focus FWD

5. Hyundai Elantra

6. Nissan Versa

7. Toyota Prius

8. Honda Accord

9. Honda Fit

10. Ford Escape FWD

Top C4C Trade-Ins

1. Ford Explorer 4WD

2. Ford F150 Pickup 2WD

3. Jeep Grand Cherokee 4WD

4. Ford Explorer 2WD

5. Dodge Caravan/Grand Caravan 2WD

6. Jeep Cherokee 4WD

7. Chevrolet Blazer 4WD

8. Chevrolet C1500 Pickup 2WD

9. Ford F150 Pickup 4WD

10. Ford Windstar FWD Van

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39 Comments on “Cash for Clunkers: Under Budget but Underachieving...”


  • avatar
    Justin Berkowitz

    The bad news? C4C did a mediocre job stimulating the domestic firms,

    And now for the really bad news. Sales from September-December are going to be even worse than usual, with so many pull-aheads.

  • avatar
    rnc

    Remember how the NHTSA’s methodology schews (i.e. Focus is counted as 2 (FWD/AWD), Fusion as 3 (FWD/AWD/Hybrid FWD) the escape as 4 (FWD/AWD & Hybrid FWD/AWD) and the F150 as 6 different vehicles) when all of those are considered as one model only Ford had 4 of the top ten sellers. (what happened to GM and ChryCo’s cars in the top ten? Did they suffer the same fate as Ford’s or did they just run out of inventory?)

    It seems to me that the NHTSA is using this method for political purposes (justifying the program as environmental).

    In terms of trade in of course those are going to be the most traded as they were the biggest sellers in the last 15 years and were the ones that would qualify for the highest rebate.

  • avatar
    krhodes1

    Yeah – Mom’s Windturd made the top (bottom?) 10! Chopped it in for a Jetta S right under the deadline. Complete and utter heap and guarantees that no-one in my extended family will consider a Ford product for eons. Three transmissions in 66K, luckily #3 held together long enough to limp it to the dealership Saturday. Barely. And it had the good graces to start crapping out again right after Congress extended the program.

    Will be most interesting to see the sales for the next couple months. And at least around here the Toyota and Honda dealerships have C4C’d vehicles stashed all over the place. VW too, actually – the local dealerships did a TON of deals for Jettas and Rabbits – and could have done a bunch more if they had any inventory. Mom got the only Jetta S sedan automatic left in the area, and we could not find her a Jetta S SportWagen automatic within a reasonable distance. Stupid VW as usual.

  • avatar
    Robstar

    Top 10 cars traded in are “American”
    only 2/10 top cars bought are “American”

    Interesting.

  • avatar
    NulloModo

    From the Ford perspective, the huge number of Explorers and F150s traded in under the program can be seen as a mark of quality. We have a lot full of nearly 150 clunkers and a lot of them are Explorers with well over 100K and a number with over 200K miles on the odo, most still running well mechanically. We heard it time and time again from customers that they would have never parted with their ‘clunker’ so soon if it hadn’t been for the once in a lifetime chance to get $4500 for it.

    We could have also sold many more vehicles if there had been any inventory. We ran out of Rangers, Focuses, Escapes, I4 Fusions and Milans, and Fusion and Milan hybrids, despite trying to buy up every car we could get our hands on in the supply chain. Given that inventory just wasn’t there, and that GM, Nissan, and Chrysler were all throwing fire sale prices, voucher matching rebates, and more long term 0% financing on top of the CARS program, coming up with 14.4% of the sales and third place is nothing to sneeze at.

  • avatar
    psarhjinian

    And now for the really bad news. Sales from September-December are going to be even worse than usual, with so many pull-aheads.

    Think about it another way: assuming those sales were probably going to be stronger anyways, you’ve managed to smooth the lumps out and brought some additional jobs in. Borrowing from the future when the net gain is positive is a good thing.

    Now, the pity is that there’s only five American-built vehicles on that list, and all were made by companies who weren’t looking to hire more people anyways. Perhaps we should have held off until the Cruze and Fiesta were available?

    One point I’d like to make is that it shows that people at least seem to have a sense for frugality and are making much more rational buying choices. There were no “toys” on the list, nor any of the decrepit models that could be bought for cheap. People used the incentive to get into good, solid cars that’ll serve them for years. I haven’t fully thought about what that means, but I don’t think it’s automatically bad.

  • avatar
    Lee

    But wait, the big three insisted they were making cars that Americans wanted to buy!

    What? Oh nevermind…

  • avatar
    menno

    The math works out to $4169 per car give or take.

    My question is this: I heard that the actual COST to the government (i.e. US) was to be about 400% of the $3 billion, or $12 billion.

    In other words, 3/4 of the money went to “overhead” for the government to run the program, according to what I read.

    Anyone find any facts to support/refute this?

    (To be honest, sadly, it wouldn’t surprise me a bit. I’ve been in the military and therefore worked for the government….)

  • avatar
    Lee

    But the big three insisted they made cars Americans want to buy. Right? Right?

  • avatar
    Jason

    How much money will Detroit lose with all of those Detroit cars swept off the roads and crushed?

    See, they’re no longer being maintained. Sales of the spare parts to keep them running for the next decade will now never happen.

  • avatar
    jpcavanaugh

    The trade-in list is no surprise. It is just a reprint of the best-sellers of the 90s from the lower end of the EPA fuel mileage ratings.

  • avatar
    TZ

    menno :
    August 26th, 2009 at 2:12 pm

    I heard that the actual COST to the government (i.e. US) was to be about 400% of the $3 billion, or $12 billion.

    I wouldn’t put much faith in the assertion unless someone comes up with some evidence. There’s a lot of garbage floating around about this particular program.

  • avatar
    John Horner

    On the upside, the local Saturn dealer cleared their lot of Astras, many of which were very left over 2008s!

    The data on trades and sales is about what you would expect. Very few 10+ year old imports on the road had the required 18 mpg or worse official fuel economy numbers. On the other hand, the imports dominate the small through mid-sized car and CUV segments and had far more inventory on the streets to sell off.

    The massive numbers of Detroit BOF SUVs and pickups sold in the 1990s were always the prime candidates for being clunkered.

    BTW, where did the original legislation say it’s purpose was to help “domestic” manufacturers and not the imports and transplants? You can’t say the legislation failed to do something it never claimed it would do.

    The effect on Detroit’s spare parts sales will be almost nothing. Very few dealer parts are purchased with which to keep 10+ year old SUVs running. In fact, the opposite is true. New vehicles are much more likely to be brought back to the dealer for their routine maintenance than old vehicles are. New vehicles also almost always get repaired after even a minor fender bender, while the old war horse just keeps another scar.

    The auto parts stores might feel a little pain from the slight reduction in the number of old SUVs on the road, but when I asked my local parts guys if business seemed to be down because of all the clunkers being scrapped he said that he couldn’t tell any difference.

  • avatar
    Shane Rimmer

    Sadly, the only Saturn dealership in the Augusta, GA area did not appear to do too well. I drive by it daily, and, while a few Auras have left the lot, they have had the same Astras and Skys on the lot for some time. I can only imagine they are surviving by being part of a larger auto group or on used car sales.

  • avatar
    Old Guy Ben

    700,000 vehicles sounds like a lot (and I wouldn’t want them between me and my destination), but it’s still only about 1/2 of 1% of automobiles on American roads.

    AutoZone should be ok for a while longer.

  • avatar
    HalfMast

    Alright everyone, stop drinking the “Big 3 Cool-aid”. 6 of these cars were American-built, even if they also come from Japanese companies.

    1. Toyota Corolla — Fremont, CA; Cambridge Ontario
    2. Honda Civic — East Liberty, OH; Alliston, Ontario; Greensburg, IN
    3. Toyota Camry — Georgetown, KY
    4. Ford Focus FWD — Wayne, MI
    8. Honda Accord — Marysville, OH; Lincoln, AL
    10. Ford Escape FWD — Claycomo, MO

    (I know there’s some Canadian facilities in there as well, but the two economies are extremely closely linked).

    Don’t forget engine and transmission facilities associated with each of these, not to mention tier 1 & 2 suppliers.

    The key to economic stimulous here is jobs. That’s much more important the the difference in tax revenue from an American or Japanese company.

    I am sure that sales will go down in September, what’s really important is if overall sales went up and getting the money into the economy sooner, rather than later.

  • avatar
    jkross22

    The effect on Detroit’s spare parts sales will be almost nothing. Very few dealer parts are purchased with which to keep 10+ year old SUVs running.

    This is incorrect. 700k older cars, err, Big 3 trucks, are about to be crushed. Owners of older vehicles will often buy remanufactured parts or non-OEM parts… probably not at a dealer. It is that part of the auto business that C4C has hurt… those that make, buy and sell those spare parts. Again, unintended consequences.

    On the upside, the local Saturn dealer cleared their lot of Astras, many of which were very left over 2008s!

    It would be interesting to see how cars like the Astra actually did on a macro scale. Since it didn’t crack the top 10, I wonder how it did compared to other unloved cars like the PT Cruiser, the Cobalt, Pontiac G3, etc.

  • avatar
    kamiller42

    I would rather see the Edmunds list, not the government’s goofy tally list.

  • avatar
    Omoikane

    Nice to see the US consumer picked as their #1 choice the worlds most reliable car: Toyota Corolla.

  • avatar
    yankinwaoz

    Oh come on. You can’t compare the crushed cars to the sold cars as an indication of anything. It doesn’t represent a smaller version of the larger car market.

    The program was designed to only allow low mileage cars to qualify. So of course domestic cars are going to be the majority of the crushers. There just aren’t that many Asian and European cars that get less than 18mpg AND are worth less than $4500.

    On the other side of the coin the new car has to get a better mileage than the crushed car. So of course it is going to skew toward smaller cars where the Asian makers dominate.

    In other words, don’t read that much in to it.

  • avatar
    FreedMike

    Justin Berkowitz :
    August 26th, 2009 at 1:36 pm

    The bad news? C4C did a mediocre job stimulating the domestic firms,

    And now for the really bad news. Sales from September-December are going to be even worse than usual, with so many pull-aheads.

    I’d rather have a sale today than a potential sale tomorrow.

  • avatar
    John Horner

    @jkross22 You must have missed my last paragraph:

    The auto parts stores might feel a little pain from the slight reduction in the number of old SUVs on the road, but when I asked my local parts guys if business seemed to be down because of all the clunkers being scrapped he said that he couldn’t tell any difference.

    Fewer than 1% of the existing US automotive fleet was scrapped under the C4C program. I don’t think the aftermarket parts and repair businesses are even going to notice the lost business if there is any. Also, people are generally much more diligent about doing routine maintenance on new vehicles than on old beaters and they get even minor cosmetic issues fixed instead of leaving them alone. The body shop business will likely see a tiny upside from the C4C program. But again, the numbers will be so small as to be unnoticeable.

  • avatar
    FreedMike

    Regardless of whether the cars bought were American-made, foreign brands made in America, or foreign-made, this program provided a much needed shot in the arm to the auto industry.

    The “downstream” effects of all these car sales are self-evident – you have people to sell the cars, banks to finance them, insurance people to cover them, and so on and so forth.

    I also think GM’s performance here – second only to Toyota – is borderline miraculous, given that the company was in a well-publicized bankruptcy a few weeks ago. Chrysler was probably hurt by lack of product, as they’d been completely shut down during their BK proceeding.

  • avatar
    Durwood

    As far as what makes were sold i think people were scrambling at the end to get a car…any car since most inventory was about gone by that time. So a lot of people ended up with maybe their second or third choice car. And i’m not sure about stealing the next few months sales. Two of my sisters bought cars because of the big trade in and they weren’t ready to buy in the near future other wise.
    If i was Ford i would keep an eye on GM, and Chrysler inventory. I wouldn’t put it past GM and Chrysler to get a heads up phone call in the future letting them know when the program is gonna start up again…..so they have plenty of product to sale.

  • avatar
    ChristyGarwood

    Just my personal musings if I were a novelist instead of a GM engineer.

    If I put myself in Toyonda shoes, I see that my car sales dropped during the financial crisis in the USA. Even though I have lobbyists in DC and plants in the SW and Calif. I cannot ask for a bailout like the Detroit3 – politics won’t let me.

    So I plant a little seed in a congresswoman’s ear and a senator’s ear, or maybe I even chat up Brian Deese. I suggest that my transplant car factories could really use a boost in sales but I know the public fallout will be horrendous if the US Gov’t gives a transplant a loan.

    I suggest that the US congress authorizes C4C like Germany did with a green twist. Turn in a gas guzzler and get dough as long as the replacement gets 10 mpg better than the old car. I know the program will favor my Toyondas but it won’t be obvious at first. It will look like every auto manufacturer is on a level playing field if they have fuel efficient cars on the lot.

    US Gov’t conscience is soothed because they know they left part of the auto industry out in the cold but plants in Ohio, Indiana, Kentucky, Alabama, Texas, etc. could use a boost. US Gov’t can claim a green victory and economic stimulus victory. Everybody wins. Except the service parts guys for Ford and GM.

  • avatar
    wsn

    What’s really interesting is the poor performance of Mazda. They sold fewer than Subaru under the program.

  • avatar
    mpresley

    Were these really “trade ins?” It is my understanding that one pays sales tax on the difference between the new car purchase price and the trade allowance offered. However, I’m told that the 4K government C4C subsidy is not considered “trade” money. Thus, one pays sales tax on the full amount (purchase price + subsidy check). Also, I’m told this 4K subsidy could be considered “taxable income” by states. Don’t know it that is true, though. If this is true, then it appears that the only ones that made out on the deal were the state governments who could charge higher sales/income tax, and those dealers/manufactures that were temporarily subsidized. Personally, I’m glad this welfare “program” has ended.

  • avatar

    According to an Automotive News survey, 44% of dealers didn’t want the program continued. Only a small fraction have gotten paid, many of the deals are being disapproved (which will put the dealer on the hook for the money), a significant number of dealers had to borrow money to cover the program, and about 10% of dealers say that participating in the program and not getting paid is putting them in danger of going out of business.

  • avatar
    tpandw

    it seems to me that any postmortem of C4C is a bit premature. We really won’t know for two or three months how many sales were simply pushed ahead. Furthermore, the supply chain is at least for some models, empty. The local Subaru dealer told me that he won’t have an unsold new Subaru on the lot for a couple of months. Furthermore, as with anything, the unintended consequences may well be more important than the intended ones, and we may not know for years even what they are. It’s interesting to speculate, but I wouldn’t want to draw any definitive conclusions any time soon.

  • avatar
    mpresley

    Not that there were too many sales prior to C4C, but it certainly stopped any non C4C sales. A non C4C consumer would have to have been an idiot to buy a car the last month (certain exceptions always apply) knowing that they were competing with a four thousand dollar government subsidy. In fact, until the market normalizes (could be five or six months) who would even think about buying a car now?

  • avatar
    NulloModo

    mpresley – On the other hand, all those without clunkers, could suddenly be back in the market. There is no reason it would take five or six months for the market to normalize – the clunker money is gone. Inventory is next to nothing at the moment, but that should be fixed within a month tops. A token bump in incentives, 0% for an extra year or an extra $500 in rebates, could easily drive all those who were left in the cold for C4C back into the showrooms.

  • avatar
    Lee

    mpresley :
    August 26th, 2009 at 6:05 pm

    Were these really “trade ins?” It is my understanding that one pays sales tax on the difference between the new car purchase price and the trade allowance offered

    Incorrect. Sales Tax is paid on the entire sale price of the vehicle.

  • avatar
    Bunter1

    Here’s a thought.

    Did this program give us a look at how the market looks when “incentives” are level?

    If so, looking at the program percentages vs. the current market shares…
    Ford down a bit, GM quite a bit, Chrysler ouch.
    Big winners are Toy, Hon and Hyun.

    Just a thought.

    Bunter

  • avatar
    Old Guy Ben

    Regarding sales tax, in Texas you pay sales tax on the price of the new car minus the amount for your trade in. The Tax for Clunkers money is used to reduce the sales price of the new car. (this is designed so that if you sell your old car yourself, you will wind up paying more sales tax on your new car. Not that anyone would sell their car to a friend for $50000 and then claim on the tax form that it was $100 to avoid paying sales tax, no, that never would happen)

    So you would save $218 (assuming the $3,500 payout from the govt) off of your sales tax.

    At least, that is how it is supposed to work (if you look it up at the State Comptroller they clearly state that the $3500 or $4500 comes off the purchase price of the new car).

    I certainly can’t IMAGINE that this would somehow get screwed up and leave the customer paying more tax than they need to because the paperwork wasn’t straight…

  • avatar
    krhodes1

    @Lee

    How sales tax is assessed is entirely up to the individual state. In Maine, it is on the difference between the trade-in and the negotiated price of the purchased vehicle, excluding the destination fee. C4C DID count as a trade-in here, since you left the old vehicle with the dealer.

    On the other hand, as I have ranted previously, in Maine excise tax is calculated on FULL sticker price, including all add-ons and dealer installed options, and the destination fee. Forever.

  • avatar
    Raskolnikov

    Omoikane :
    August 26th, 2009 at 4:27 pm

    Nice to see the US consumer picked as their #1 choice the worlds most reliable car: Toyota Corolla.

    Really? Many of these folks who purchased a brand spanking new Corolla on the dime of the taxpayer now must deal with this:

    http://news.yahoo.com/s/afp/20090826/ts_alt_afp/usjapanautocompanyrecalltoyota_20090826213028

    How embarrassing!!

    [Raskolnikov: your e-mail doesn\'t work. Please contact me at editttac [at] gmail.com if you want to know why your comment was edited.]

  • avatar
    Old Guy Ben

    Calculated Risk has put up the tally by state in a sortable list along with population. Kinda fun to look at.

    There were 10X more Cash for Clunkers deals in Guam, for example, than in Washington DC. I’m thinking the Guam Toyota dealer (if there is one) is smiling right now.

  • avatar
    GS650G

    This list is hardly a surprise given the main factor was bad gas mileage. Add poor resale due mainly to high production numbers (F-150 IS the top selling vehicle for 30 years) and this list is no surprise.

    Now comes the spin about how green this all is and how billions of gallons of gas are going to be saved. You have to tack a few zeros on the end of a statistic or no one notices.

    Tons of CO2. Millions of pounds of something else.

    If we are going to supplement every aspect of the economy by taking from the productive and handing it over to consumers to spend instead, can we have a few referendums on the matter? How about we start voting for the freebies instead of candidates. High vote wins.

    I want a few million dollars so I can retire to a beach resort in Mexico. You guys get your own bailout.


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