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Interest in ‘Cash for Clunkers’ Starting to Wane?

August 11th, 2009 Michael McDonough

I came across an article on the WSJ online this morning indicating that interest in the ‘cash for clunkers’ program may be diminishing.  According to the article, Edmunds.com reported that interest in the program peaked on July 29th, and has since declined 15%.   They went on to say that based on this trend, sales could return to pre-program levels by as early as next week.  They accredit the decline to a reduction in the sense of urgency now that Congress has appropriated additional funds; Congress recently approved an additional US$2.0bn for the program.  To date 245,384 trade-ins totaling about US$1.03bn have taken place through the program.  Edmunds.com anticipates that despite a slowdown in the program car sales will continue to improve this summer on the back of an economic recovery and budget minded consumers.  Edmunds.com’s director of industry and pricing analysis, Jessica Caldwell, had this to say, “The real risk is this fall. Will the economy have picked up enough momentum to keep sales at these levels?”

Currently, I believe maintaining strong sales volumes through the fall will be tough , as most of those looking to purchase new cars would have done so now while they could still take advantage of the current program.  In the mean time,  sales volumes should remain elevated, as long as the program remains in place, which should be at least September.

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