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Cash for Clunkers Depletes Dealer Inventory


The Cash for Clunkers program has had many surprising twists since the bill was signed into law in June. After the measure was unsuccessfully challenged in the Senate, critics of the bill still doubted whether or not it would be a success. Now, just one week after its official start, the initial $1 billion in cash is gone as well as many popular models from dealer inventories.

Dealers across the country are reporting that inventory for the most popular fuel efficient models are nearing depletion. According to the website, , a Ford dealer in Boston wrote in to say that they were completely out of Ford Focus, Escape and Fusion models.

A large East Coast Toyota franchise reported that they were running out of Corollas and Camrys with no immediate relief in sight for the month of August. Popular Volkswagen diesels models were gone from another local dealer and well as BMW diesel models from a Virginia retail location.

At a time when the auto industry was struggling to move inventory, many would think the sudden influx of car sales would be a welcomed problem. However, given that the Cash for Clunkers program started with little advance notice to manufacturers, production schedules for the more popular models are unlikely to meet the August demand.

Car dealers are now left with the challenge of adjusting their August selling strategy without popular Cash for Clunkers models. Now that consumer floor traffic has increased due to government rebates, inventory levels are well below where they need to be in order to gain the most benefit from the CARS program.

Manufacturers are most likely discussing how they can replenish dealer stock before the Cash for Clunkers program ends. The challenge is without the surety of additional funding from the Senate this week; manufacturers are forced to play a dangerous game of Texas Hold’em.

Consumers have been encouraged to shop early before the funding for the Cash for Clunkers bill evaporated. Now the Pasch Consulting Group (PCG), automotive marketing consultants, are advising consumers to shop early before the qualifying fuel efficient models are gone. There is also uncertainty on how long the extra $2 billion in funding will extend the CARS program.

Brian Pasch, CEO of PCG who created the popular website, noted “Some of the most aggressive Cash for Clunkers retailers are seeing their supplies diminish and are concerned. Dealers who were more conservative and waited until July 24th to start will see similar patterns in the coming weeks. The real challenge will be to see how fast dealer inventory levels can be replenished. ”

Consumers who are considering the Cash for Clunker program are reminded that funding has yet to be officially extended to guarantee a firm program end date. With this in mind and inventory levels dropping for popular models, shopping early makes the most sense.

Consumers are encouraged to visit the only official destination for information on the Car Allowance Rebate System (CARS) at for the latest updates on the program.


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