The cash-for-clunkers program ends Monday. There is general agreement that it was a success. But what did it really signify? Michigan Radio's Senior Political Analyst Jack Lessenberry takes a look.
Well, the cash-for-clunkers program is finally ending, and its success has made it very hard to argue that the government can't do anything right. The Obama Administration has done an excellent job stimulating auto sales, right when the industry most needed it.
Nobody is ever going to be completely satisfied. For example, the dealers are moaning because, they say, it is taking a long time to reimburse them. Well, we should be sympathetic, but not too sympathetic. The fact that they don't get their money the next day may mean the government is actually scrutinizing the paper work.
This was a three billion dollar program with lots of potential for massive fraud, if we weren't careful. Fortunately, the feds apparently are following the rules, and according to Washington, a large number of the early applications have been bounced back for incomplete or inaccurate paperwork. They built some safeguards into this program, in an attempt to make sure that nobody cashed in on phantom cars or wrecks that they towed in from junkyards.
Now, nobody thinks that dealers ought to have their money tied up forever. But based on what I'm seeing, they aren't waiting any longer than most of us wait for our income tax refunds.
So cash-for-clunkers worked to give the automakers a shot in the arm. It will be months before we really know how well it worked. Oh, we know it moved more than half a million cars off dealer lots.
But what we don't know is this: Did the program merely speed up purchases that were going to be made in the next few months anyway? Or were people trading in cars they might have hung onto for years? If car sales fall dramatically after clunkers ends, and stay poor for months, we'll know that it didn't really prime the pump.
When all the data is in, the cash-for-clunkers report should hold some valuable lessons for the domestic auto industry. For one thing, the early data indicates we may soon have a new Number One car manufacturer: Toyota. Preliminary figures indicate that about 19 percent of new car sales under the clunker program are Toyotas.
General Motors cars accounted for about 17.6 percent, which is a bit better, frankly, than I thought they would do.
There's something else that bothered me about this program. Many of the cars turned in were not true "clunkers" as I think of them. There were a lot of ten-year-old cars that were still perfectly good.
After all, you only had to buy a new car that got as little as five miles a gallon better than your old one to qualify.
Yesterday in Detroit, I passed a 1978 Ford Fairmont, belching fumes. Later, I saw a 1970 Chevy Impala with one of its doors wired shut and a big crack across the back window. Those sorts of cars are the real polluters, not to mention eyesores. However, they wouldn't have qualified for the cash-for-clunkers program.
No car made before 1984 did. Now -- wouldn't it have been nice to find some way of destroying these cars, and transferring the alleged circa 1995 clunkers to their owners? Well, maybe next time.