This is at least what the agencies involved in the program say. Apart from generating revenue from selling vehicles, the program has sideline benefits as well. "Manufacturers and dealers have spent millions to reach consumers who qualify for the $4500 government funded rebates," Sharon O'Connell CashforClunkers.org representative said.
Some dealers claim they have increased their budget in light of CARS by as much as 80 percent. They hired new personnel, bought new inventory and even launched their own cash for clunkers portals.
"The stimulus helps local markets more than national car companies because car dealers stimulate the local economy through their big advertising expenditures, job creation and enormous state tax revenue," O'Connell added. "A small dealership who sells 100 vehicles a month spends an average of $500 per car in advertising, which is a total of $50,000 that is spent in local advertising."
In the three days since it debuted, the program sold some 4,000 vehicles. And expectations run high.
"We predict that the annualized selling rate for July will exceed 10 million vehicles for the first time this year due to the government program bringing dormant consumers back into the market," O'Connell believes. "We think August could do even better with a million or more sales due to increased demand from the CARS program."
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