A CLOSER LOOK AT CASH FOR CLUNKERS FACTS

The Cash for Clunkers car sales program, created as part of the economic stimulus, was designed to boost auto sales and promote environmental goals by offering consumers clunker car rebates to trade in certain late-model used cars, SUVs, trucks and vans for more fuel-efficient new vehicle models.

Judging by the wide popularity of the Cash for Clunkers car sales program it's a big success. So many people took advantage of the clunker car rebate that it nearly ran out of funding in less than a week.

Official estimates showcase that the clunker car rebates program has delivered on all its intentions, from spurring economic activity to encouraging new vehicle sales to addressing environmental concerns.

Cash for Clunkers pushed car sales up to the highest level in a year

About 400,000 new cars, SUVs, trucks and vans have sold under the Cash for Clunkers rebates since the program began. By extending the Cash for Clunkers car sales program - and tripling the program's budget to $3 billion - estimates show that it could fund a total of 750,000 new cars, SUVs, trucks and vans sales. Whether or not Cash for Clunker program is a stimulus to the US economy, the measure has undoubtedly incited auto sales.

Chevy, Buick, Pontiac, GMC, Chrysler and Dodge car dealerships have experienced an increase in new car buyer traffic through the Cash for Clunker program in their auto showrooms with consumers taking advantage of this program to buy new cars, SUVs, trucks or vans.

Automakers, including Chevy, Buick, Pontiac, GMC, Chrysler and Dodge, have struggled through the worst decline in sales during the first half of the year but the clunker rebates provided a vital boost in new cars, SUVs, trucks or vans shoppers.

Cash for Clunkers boosted car sales in July and analysts expect a similar clunker rebate help to the struggling auto industry in August. The fact that the Clunkers stimulus was extended will probably spark another tidal wave of Cash for Clunkers car sales in car dealerships nationwide. The good news also is that more than a half top new SUVs, van, truck or car sales under the Cash for Clunker program come from domestic automakers, including Chevy, Buick, GMC, Chrysler, Dodge and Ford vehicles, according to Clunker stimulus government reports.

Clunker Stimulus environmental benefit

Not only aimed at boosting car sales, Cash for Clunkers program is also an environmental measure aimed to increase fuel efficiency and reduce pollution by replacing used less fuel-efficient vehicles with new cars, SUVs, trucks or vans that get better miles per gallon.

The official Clunker stimulus government data indicates that so far Cash for Clunkers car sales has been a green success. Reports show that 83% of the vehicles traded in were inefficient used trucks or SUVs - for much more efficient new cars, which resulted in an average fuel-economy increase of 61%.

More like 'Clash for Clunkers' Facts - Clunker Stimulus criticism

If all the facts show that Cash for Clunkers is a great success, than why is it met with criticism (and referred to as Clash for Clunkers) from various experts ranging from economists to environmentalists to local car dealers, parts suppliers and repair shops?

Is Clunkers program truly an economic stimulus boost?
Renowned economists still question the success of Cash for Clunkers car rebate program, and one of the most cited observations is that the Clunker economic stimulus plan is really just economic redistribution, because the money that is being "injected" into the economy is already in the economy - so it can't truly be a stimulus (Russell Roberts, George Mason University).

How green are Cash for Clunkers car sales?
Environmentalists have doubts of their own. While Clunker car rebates could benefit the environment and US dependence on foreign oil, along with saving the individual car consumers money for the fuel, the Clunker stimulus could also enable car, SUV, van or truck buyers to make some wrong decisions.

Contrary to official top 10 Cash for Clunkers car sales list, Edmunds.com shows large SUVs, big pickup trucks, and other not so green vehicles as bestsellers at Cash for Clunker car sales.

Additionally, independent estimates indicate that Clunker stimulus is rather expensive way to help the environment - yet the reduction in auto emissions is as small as a fraction of 1%.

Cash for Clunkers European Style
US Cash for Clunkers car sales program is modeled on similar plans in many European countries, which have indeed boosted new car sales significantly - Germany 39%, , France 26%, etc. (Jon Markman, MSN Money). But, simultaneously with their Clunker car rebates, Europe also increased motor fuel taxes to channel the trade to more fuel-efficient models.

Additionally, gas price is considerably lower in US than in Europe. So a clever shaped tax could stabilize the price of gas at a level high enough to discourage driving and at the same time generate revenue that could be used for multiple green programs, including Cash for Clunkers itself.

And still the German Clunker stimulus program faced criticism by many, including used vehicle dealers, replacement car parts suppliers and auto repair shops.

Is Clash for Clunkers truly a Triple Threat?

Is the Clunker stimulus a win for consumers, a win for the environment, and a win for the automotive industry? Probably not. But it could be easily improved. That's why many experts and consumers alike believe that the areas for improvement of Clunker rules and regulations are:

• Allow the vouchers to go towards used vehicles - if they are more fuel-efficient.
• Include cars more than 25 years old - they are indeed the worst gas guzzlers of all.

And along with a relatively small fuel tax increase, Cash for Clunkers car sales program could not only discourage too much driving but also finance multiple green programs, including Cash for Clunkers itself.