Cash For Clunkers Helps Ford To July Gainby
Ford Motor Co. on Monday will post a single-digit sales gain over the same month a year ago, the first monthly sales gain the automaker has posted since 2007.
Company officials said Sunday they attributed the sales gain to the Federal Cash for Clunkers program, as well as a feeling among a growing number of consumers that the worst of the Recession is behind them.
All automakers will post July sales on Monday.
The Cash for Clunkers program, signed into law in late June, allowed dealers in July to give consumers with old vehicles not worth much in a trade an additional $3,500 or $4,500 above their own incentives courtesy of the U.S. taxpayer. The program, modeled after similar programs in Europe, is part of the economic stimulus.
Under the program, a buyer who trades a vehicle that gets 18 mpg or less for a car with a mileage improvement of more than four miles per gallon but less than 10 were eligible for $3,500; a buyer whose new vehicle was rated 10 miles per gallon or better than the old one was eligible for $4,500; an old pickup truck could be swapped for a new one with just a 2 mpg improvement for $3,500. If the pickup or SUV being bought is 5MPG more, the benefit is $4,500. Heavu Duty trucks and some commercial vehicles have different rules. The trade in vehicles have been old with high-mileage because there is no other trade-in value on the car, unless automakers and dealers add to the government rebates (which most have).
The Clunkers program is estimated to have been a part of more than 200,000 sales in July. It proved so popular that the House of Representatives scrambles Friday to pass a bill authorizing an additional $2 billion. The first $1 billion was exhausted on Friday after just a week of the government processing applications. The U.S. Senate will take up the vote thos week. President Obama has said he will sign the bill.
Though the bill was written to give preference to people trading in old pickup trucks and full-sized SUVs for new ones, the results favored cars. The top vehicle traded in under the Clunkers program was the Ford Explorer SUV, most of them from the 1990s when Ford was selling around 400,000 a year. The top vehicle purchased under the program was the Ford Focus. There were no pickups in the top ten vehicles purchased under Clunkers. And there was only one SUV, the Ford Escape crossover, which is offered in a hybrid version.