It's the economic-stimulus success story of the year with the uncanny name: Cash for Clunkers.
Nearly 700,000 new cars were bought in exchange for trading in gas-guzzling, environmentally unfriendly vehicles through the program that ended Monday after a monthlong ride, the U.S. Transportation Department said yesterday.
The government, through auto dealers, cut costs on new, more fuel-efficient cars or trucks by $3,500 or $4,500, depending on the miles-per-gallon performance of the trade-in. The price reductions were made through vouchers to the dealers, and they totaled $2.88 billion when the program ended Monday at 8 p.m. - just under the $3 billion Congress allotted.
Pennsylvania and New Jersey both finished in the top 10 among the 50 states, the Virgin Islands, and the District of Columbia in requested rebate vouchers. Pennsylvania finished sixth with $138.7 million worth of rebates, and New Jersey came in ninth with $103.4 million.
California registered the most at $326.8 million in vouchers. The District of Columbia was last with $67,500.
About 84 percent of consumers traded in trucks, and 59 percent purchased passenger cars. The average fuel economy of the vehicles traded in was 15.8 miles per gallon and the average fuel economy of vehicles purchased was 24.9 miles per gallon, according to transportation officials.
The Focus, made by Ford, was the only vehicle made by a U.S. manufacturer to finish among the top 5 purchased under the program. Ahead of the Focus were Toyota Motor Corp.'s Corolla and Camry, Tokyo-based Honda Motor Co.'s Civic, and the Elantra, made by South Korea's Hyundai Motor Co.
"American consumers and workers were the clear winners, thanks to the Cash for Clunkers program," Transportation Secretary Ray LaHood said. "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."
A preliminary analysis by the White House Council of Economic Advisers projected that "clunkers" helped to boost economic growth in the third quarter of this year by three-tenths to four-tenths of a percentage point at an annualized rate.
The report also credited the program for creating or saving 42,000 jobs in the second half of 2009, and sustaining the increase in gross domestic product in the fourth quarter because of increased auto production.
Ford, General Motors Corp., and Honda have all recently announced plans to increase production as a result of the demand generated by the program.
"The clunkers program has proved more popular with the public than anyone expected," John McEleney, chairman of the National Automobile Dealers Association, said. "Now, we have to make sure that dealers will not be penalized by a loss of reimbursement for legitimate program sales for reasons outside of their control."
McEleney was referring to the repeated crashing Monday of the Transportation Department Web site as dealers frantically filed their rebate applications to meet the deadline. LaHood said his department now had an army of 2,000 people processing dealer applications.