Cash for Clunkers wildly successful

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We know that thousands of Americans are taking advantage of the Cash for Clunkers program, so the program is helping to drive auto sales and stimulate the economy. In case you haven’t noticed, we can use some stimulation.

Beyond that, however, it turns out that the program is even more successful than originally thought when it comes to replacing gas guzzlers with fuel efficient cars.

And the Transportation Department reported that the average gas mileage of the vehicles being bought was significantly higher than required to qualify for a rebate of $3,500 to $4,500. Of 120,000 rebate applications processed so far, the department said the average gas mileage of cars being bought was 28.3 miles per gallon, for S.U.V.’s, 21.9 miles per gallon, and for trucks, 16.3 miles per gallon.

“The statistics are much better than anybody dreamed they would be,” said Senator Dianne Feinstein, Democrat of California. The actual mileage gain so far, she said, was not due to the details of the law but “the good judgment of the American people.”

Senator Feinstein, along with Senator Susan M. Collins, Republican of Maine, was the author of an early version of a “cash for clunkers” bill that would have required bigger improvements in mileage. Their decision to express support for extending the current version of the program, at a news conference late Monday afternoon, was an important signal to other senators concerned about whether the program was doing enough for the environment.

Senator Charles E. Schumer of New York, an early backer of the Feinstein-Collins approach, also voiced support for an extension. “If it ain’t broke, don’t fix it,” he said. “It’s working in every way. It’s working as stimulus, it’s working to help families, it’s working to improve mileage.”

The chances are pretty good that Senate will vote this week to extend the program so that it can be signed by President Obama.

Some opponents of the program have expressed concern that auto sales will stall after the program ends, whether it ends now or in the fall after an extension. This concern is unfounded. Many people taking advantage of this program have older cars that they’ve driven for years, and many of them keep older cars for the simple reason that they are thrifty. Without this program, many of them would likely keep their old cars. With the program, they have a huge financial incentive to junk the old car and pick up a new one at a great price. Along those lines, Ford announced today that they see car sales rebounding through 2010, as pent-up demand starts to drive the market.

  

Clunker mania

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The cash for clunkers program is off to a roaring start, as Americans seem ready to purchase new cars when presented with a great deal. This is a very encouraging sign for the economy, as a boost in auto sales would go a long way towards getting us out of this recession.

The program is so popular that it’s running out of money after just one week. The House has passed a bill to add $2 billion to the original $1 billion program. The Senate will take it up next week. Senator Diane Feinstein won’t support the bill without tougher fuel standards, and John McCain might filibuster the bill in the Senate. It’s not a done deal yet.

  

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