The United States’ “cash for clunkers” program was rather controversial when it was first enacted last year, but a new study by Maritz Automotive Research Group indicates the CARS program was highly effective at generating new car sales.
Original estimates suggested the United States cash for clunkers program generated between 125,000 and 346,000 new vehicle sales, but Maritz’ research found the CARS program actually spurred 542,000 new car sales. Moreover, the study found that sales were incremental and did not simply pull sales forward.
“Our findings not only provide strong evidence that many more vehicles were sold as a direct result of the incentive program than were previously estimated, but they also largely debunk the myth that ‘cash for clunkers’ mortgaged future car and truck sales,” commented Maritz vice president Dave Fish.
“In fact, the program resulted in sales of vehicles to people who don’t normally buy them.”
Using data provided by the NHTSA, the study also found that about 50 percent of the cars traded-in during the program were at least 10 years old with 100,000 miles on the clock. Older vehicles traded-in averaged 15.8mpg while new vehicles purchased under the program averaged 24.9mpg.
The NHTSA claims the CARS program created or saved 60,000 U.S. jobs.
References
1. ‘Study: ‘Cash for clunkers…’ view
