Since the Cash for Clunkers program was implemented a few weeks ago, demand for new vehicles has skyrocketed–so much so that many automakers are short on supply! Through last Tuesday, dealers had requested reimbursement for 292,447 vouchers issued under the clunkers program totaling about $1.23 billion. These vouchers are worth $3,500 or $4,500, depending on the fuel-economy standards of the cars involved in the trade-in.
A senior analyst from Edmonds.com said that the original $1 billion funding for the program was low relative to the size of the auto market. The analyst explained that this, in turn, created a “gold rush” mentality, where consumers stormed dealers at the end of July and in the first days of August to cement discounts with rebate funding running low.
The overwhelming success of Cash for Clunkers has led both General Motors and Toyota to raise their production output, even though many manufacturers are bracing for a sales slowdown once the program expires.