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Interest in Cash for Clunkers Declines, Says Edmunds.com

Nearly three weeks after its initial launch, consumer interest in the government-funded “Car Allowance Rebate System” has already declined by 15 percent, according to purchase intent data from Edmunds.com.

by Staff
August 12, 2009
2 min to read


SANTA MONICA, Calif. — Nearly three weeks after its initial launch, consumer interest in the government-funded “Car Allowance Rebate System” has already declined by 15 percent, according to purchase intent data from Edmunds.com.

The program, also known as “Cash for Clunkers”, launched on July 27 with $1 billion worth of federal funding. Interest in the program peaked on July 29, and it received an additional $2 billion in funding on August 7.

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“The funding for the original program was very low in relation to the size of the auto market. This created a Gold Rush mentality where consumers hurried to take advantage before funding ran out. With additional funding now approved, there is no longer an urgency to participate in the program,” said Michelle Krebs, senior analyst for Edmunds.com. “Interest in the program is fading as fast as the first billion dollars was used up.”

The Edmunds.com analysis was based on Internet shopping purchase intent data. It also showed that if current trends hold, purchase intent would be back to pre-Cash for Clunker levels by August 20.

“Despite this decline in clunker activity, we expect auto sales to be improved through the summer as value-oriented consumers look for deals before new models start arriving,” said Jessica Caldwell, director of industry and pricing analysis for Edmunds.com. “The real risk is this fall and whether the economy will have picked up to keep sales at current levels.”

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