How Will Cash for Clunkers Affect U.S. Suppliers?
The N.Y. Times reported today that the secretary of transportation and the Senate majority leader both feel confident that the Senate will vote this week to revive the “cash for clunkers” program with an infusion of another $2 billion in funding, as the House did a few days ago.
If you haven’t heard already, the Car Allowance Rebate System (CARS) –popularly known as “cash for clunkers” –is a program designed to boost the U.S. auto industry while helping consumers trade in cars with low mpg ratings. Consumers can scrap their gas guzzlers in exchange for a credit of up to $4,500 toward the purchase of a new, more fuel efficient vehicle.
CARS was rolled out in late July, but in less than a week, the program burned through the $1 billion Congress had appropriated. Now, cash for clunkers is essentially stalled until both the House and Senate can approve more funds.
Some see the overwhelming success of CARS as a welcome sign of underlying demand among U.S. consumers.
