The "Cash-for-Clunkers" program enacted by the U.S. government sparked nearly 700,000 auto sales driven by trade-in incentives, officials said on August 26.
The Transportation Department said rebate applications worth $2.877 billion were submitted by the August 25 deadline, under the three billion dollars provided by Congress for the program.
"American consumers and workers were the clear winners thanks to the Cash for Clunkers program," said Transportation Secretary Ray LaHood. "Manufacturing plants have added shifts and recalled workers. Moribund showrooms were brought back to life and consumers bought fuel efficient cars that will save them money and improve the environment."
According to a preliminary analysis by the White House Council of Economic Advisers, the program will create or save 42,000 jobs in the second half of 2009 and boost economic growth in the third quarter of 2009 by 0.3 to 0.4 percentage points.
Officials said the increase in economic activity would be sustained in the fourth quarter because of increased auto production to replace depleted inventories.
Cars made in America topped the most-purchased list, including the Ford Focus, Toyota Corolla and Honda Civic.
The average fuel economy of the vehicles traded in was 15.8 miles per gallon and the average fuel economy of vehicles purchased was 24.9 miles per gallon -- a 58% improvement.
The program, begun with one billion dollars that was quickly snapped up by car-hungry consumers, was extended less than two weeks later with an additional two billion dollars allocated by Congress.
The plan is modeled on programs in France, Germany, Italy and Spain, which have had success, although some U.S. critics argue it adds to government debt and merely speed up sales that would have occurred anyway.
Copyright Agence France-Presse, 2009