Aug 7, 2009 10:15 am US/Central
Obama Signs Bill Refueling 'Clunkers'
Program Extended Until Labor Day, Unless It Runs Out Of Cash First
WASHINGTON (AP) ―
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A clunker to be shredded at All Recycling in Englewood.
CBS
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U.S. Transportation Secretary Ray LaHood climbs inside a new Buick crossover vehicle during an event to kick off the Car Allowance Rebate System, or 'Cash for Clunkers' program, July 27, 2009, in Washington, DC.
Win McNamee/Getty Images
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It's official: Car shoppers are getting more time to trade in their clunkers for cash.
President Barack Obama signed into law Friday morning an extension of the stimulus program that proved so popular it ran out of money.
The Senate voted Thursday to triple the "cash-for-clunkers" fund to $3 billion and extend the program to Labor Day, assuming the new money lasts that long. The law gives owners $3,500 to $4,500 for trading in old cars that use a lot of gas for newer, more efficient vehicles.
Under the program, passenger car owners are eligible for a voucher worth $3,500 if they trade in a vehicle getting 18 miles per gallon or less for a new car getting at least 22 mpg. Vouchers of $4,500 are available for owners who trade in a passenger car getting 18 mpg or less for a model that gets at least 28 mpg.
There are similar guidelines for SUVs and pickup trucks.
Dealers are barred from reselling the old models, and are charged with assuring their destruction.
Jeremy Anwyl, CEO of the auto Web site Edmunds.com, said the unintended result is that vehicle prices are climbing.
"What we've created now is a shortage for key models," he said. "Prices are going up dramatically."
Hyundai Motor Co. has added a day of production at its Montgomery, Ala., factory, while Ford Motor Co. and GM are considering following suit.
Tom Stephens, vice chairman of product development at GM, said in an interview that the company has had spot shortages of compact and midsize cars, which have been popular with consumers jettisoning their clunkers. The company also reported an increase in sales of the Chevrolet HHR small sport utility.
"Consumer confidence is really what you need here," Stephens said. "It's hard for them if they don't know if they have a job or a for-sure paycheck to go out and make a major purchase, so I think this is kind of jump-starting some things."
The longer-term impact is uncertain, but so far, GM's share of cars sold under the program is largest, accounting for 18.7 percent of new sales. Toyota Motor Corp. followed with 17.9 percent, while Ford had 16 percent. Detroit automakers represented 45.3 percent of the total sales while Toyota, Honda Motor Co. and Nissan Motor Co., all Japanese firms, totaled 36.5 percent.
Toyota also has the best-selling new model for traders of clunkers, the Corolla. The Ford Focus, Honda Civic, Toyota Prius and the Toyota Camry are also favorites. There is one SUV on the list, the Ford Escape, which also comes in a hybrid model that can get up to 32 mpg. Six of the top-10 selling vehicles are built by foreign manufacturers, but most are built in North America.
(© 2010 The Associated Press. All Rights Reserved. This material may not be published, broadcast, rewritten, or redistributed.)
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