CashForClunkers

Australia's recently seated prime minister, Julia Gillard, is just now talking about a "cash for clunkers' program when most other countries ended theirs ages ago. Yet for Gillard, the program isn't about stimulating car sales but rather about stimulating the Earth: Gillard wants to get about ten percent of Oz's two million pre-1995 vehicles off the roads.

Curiously, there was actual outrage in Congress recently over the fact that American cars were left out of Japan's version of a Cash-for-Clunkers program. We say curiously because Congress has been pretty copacetic for decades about Japan's lopsided, unfair import policies. But, when our elected officials learned that the roughly $2,500 given to Japanese consumers for their old beaters could not be put toward the purchase of a new American car, our lawmakers sprang into action.

Cash-for-Clunkers was among the more watched auto-related story lines of 2009. With the industry hurting, the government provided cash vouchers of between $3,500 and $4,500 to anyone who turned in a vehicle that was eight (or more) years-old and with between two and 10 miles-per-gallon worse fuel economy numbers than the new car or truck with which it was replaced. The program went from fledgling idea to a done deal in a matter of a few months, showing that the U.S. government is capable of move quickly when it really wants to, albeit with the help of a big fat $3 billion check.

There is little doubt that Cash for Clunkers gave auto sales a big boost in late July and most of August, but there has been considerable debate as to how much help taxpayers' $3 billion provided. Customers who purchased a new car or truck were rewarded in many ways, especially when you consider the U.S. government paid out a median price of about $4,000 per clunker. Those customers are also saving at the pump, as each car turned in was 4-10 mpg better than the vehicle it replaced. Dealers sold more cars. States received more tax dollars. So the program was a success, right?

After a month of relentless Cash for Clunkers coverage, we were more than pleased when the Fed's buy-back program finally ended. Nearly every other day C4C was in danger of getting shut down because of a lack of funds. Then there were dealers were worried about getting paid and customers who had to sign responsibility forms in the event their clunker wasn't covered under the program. But while we've had more than our fill of C4C, the car-buying public wants more.

Cash for Clunkers helped all automakers move some metal during the month of August and now Ford is looking to capture lightning in a bottle up in the Great White North. Ford of Canada is working with the Clean Air Foundation to provide incentives of up to $3,000 for vehicles 15 years or older. Three hundred of those dollars would come from the Canadian government as part of its Retire Your Ride program.

2009 has been a sales disaster for the automotive world, as industry figures have dropped to the lowest levels in three decades. Cash for Clunkers has been a boon for the otherwise poor year, though, as hundreds of thousands of Americans have traded in their old cars for new, more fuel efficient metal.

J.D. Power has analyzed sales data from 10,000 dealers over the first two weeks of August, and the industry research powerhouse feels the program will boost August sales to 1.1 million units. Even better, their analysts have informed The Associated Press that the bulk of those sales will come from retail customers, with total sales of over 1 million units. If Power is right, August sales would rise 2% over August 2008, making it the first year-over-year monthly sales bump in two years.

When Cash for Clunkers Version 1.0 hit the ground running like Hussein Bolt in the 400 meter relay, the U.S. government was caught a little flat-footed by the sheer volume of demand. As a result, after only a few days after C4C was started, the government was looking to shut down the program, and dealer ad dollars were twisting in the wind. Customers were confused, too, as many were unsure if the incentives were still available.