U.S. 'cash for clunkers' yields nearly 700,000 sales

The U.S. government's "cash for clunkers" vehicle trade-in program produced almost 700,000 automobile sales, the Transportation Department said.

Rebate applications valued at $2.88 billion were submitted by the deadline, the department said today in a statement. The program, which offered buyers discounts of as much as $4,500 to trade in older cars and trucks for new, more fuel-efficient vehicles, ended Aug. 24. The government granted dealers an extra day to file repayment applications.

The initiative helped restore demand for the slumping auto industry, prompting General Motors Co., Ford Motor Co. and Chrysler Group LLC to boost production plans. While sales are likely to fall to a "more sustainable level," any offsetting effect on U.S. growth in future years is expected to be gradual, the White House Council of Economic Advisers said this week.

The effort "was incredibly well received judging just by the number of consumers that participated," said George Pipas, Ford's sales analyst. "You've got an economic stimulus program and an environmental program, and seldom do those two programs sleep in the same bed."

The U.S. had estimated the program's initial $1 billion would spur 250,000 clunkers sales. That amount was exhausted less than a week after the initiative began. Congress added an additional $2 billion intended to keep it going through Labor Day, which is Sept. 7.

The Transportation Department formally kicked off the effort in late July.

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