Search online for “Cash for Clunkers,” and here’s one thing you’ll find: stories about its negligible overall impact on the economy.
Wrong, says Maritz Automotive Research Group. The Toledo, Ohio, independent automotive research company recently surveyed participants in last summer’s federal program designed to stimulate new-car sales and get gas-guzzlers off the road. On Tuesday, the company shared its results.
One key finding: 90 percent of those participating in Cash for Clunkers said they would not otherwise have bought a new car.
According to federal government data, 677,000 purchases were made through Cash for Clunkers from late July through August. Maritz’s research showed that 542,000 were incremental new car or truck sales, meaning those purchases would not have occurred without the incentives. Previous estimates by industry analysts put the incremental sales figure between 125,000 and 346,000.
The government’s Car Allowance Rebate System, or CARS, offered vouchers of $3,500 or $4,500 to owners of older, gas-guzzling vehicles who traded them in for new, fuel-efficient models. The program was so popular that it ran out of its $3 billion in funding in two months.
“Our findings not only provide strong evidence that many more vehicles were sold as a direct result of the incentive program than were previously estimated, but they also debunk the myth that Cash for Clunkers mortgaged future car and truck sales,” said Dave Fish, a Maritz vice president. “In fact, the program resulted in sales of vehicles to people who don’t normally buy them.”
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Article courtesy McClatchy-Tribune News Service via cleveland.com