Edmunds.com Evaluates "Cash for Clunkers," Determines Program Generated 19.6 Million SAAR Shopping Rate


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Edmunds.com Evaluates "Cash for Clunkers," Determines Program Generated 19.6 Million SAAR Shopping Rate

SANTA MONICA, Calif. — August 6, 2009 — As the Senate considers a "Cash for Clunkers" extension, Edmunds.com, the premier online resource for automotive information, today released some initial analysis about the program's results to date.

"Most reports on this program lack context," remarked Edmunds.com CEO Jeremy Anwyl. "Having the baseline data allows our team to create the definitive 'Cash for Clunkers' analysis."

According to Edmunds.com, in the months before "Cash for Clunkers" launched, 39 percent of new car sales involved a trade-in. Since then, 51 percent do. Prior to the program, nearly nine percent of trade-ins were vehicles that would have qualified as "clunkers." Since the launch, 39 percent of trade-ins qualify.

"There is no question that the program has generated results. The shopping activity we've witnessed has generated a SAAR of 19.6 million, remarkable compared with the industry's sales record of 17.4 million set in 2000," noted Edmunds.com Senior Analyst Jessica Caldwell. "Of course, this level of activity will not continue, as it reflects the behavior of those anxious and able to participate in the program — and that is a limited set of people."

Edmunds.com analysts evaluated which models are typically purchased when clunkers were traded in during May and June of this year, and compared that to the list of most popular models being purchased through the Cash for Clunkers program:

Before "Cash for Clunkers" Launched
Make
Model
Share of sales with clunker trade-ins
Ford
F-150
4.7%
Chevrolet
Silverado 1500
4.1%
Ford
Escape
3.8%
Dodge
Ram Pickup 1500
2.6%
Ford
Edge
2.1%
Honda
Odyssey
2.0%
Chevrolet
Traverse
1.9%
Toyota
Tacoma
1.9%
Toyota
Camry
1.9%
Ford
Fusion
1.7%


Since "Cash for Clunkers" Launched
Make
Model
Share of sales with clunker trade-ins
Ford
Escape
4.8%
Ford
Focus
4.5%
Jeep
Patriot
3.6%
Dodge
Caliber
3.1%
Ford
F-150
2.9%
Honda
Civic
2.9%
Chevrolet
Silverado 1500
2.6%
Chevrolet
Cobalt
2.5%
Toyota
Corolla
2.3%
Ford
Fusion
2.2%

*Note: This list differs from other published lists because, unlike the others, it includes trucks.

"Participants in the program are choosing more fuel-efficient vehicles. Before, cars were only two of the top 10 vehicles purchased with clunker trade-ins; now, six are cars," stated Edmunds.com Senior Analyst Michelle Krebs, who evaluates the data more thoroughly in her report for AutoObserver.com. "Interestingly, all buyers, regardless of trade-in, are opting for smaller, more fuel-efficient cars at a higher than usual rate."

Next, the team determined which models were typically traded in for new cars or trucks before the program, and how that changed once the program was launched.

Before "Cash for Clunkers" Launched
Make
Model
Share of trade-ins
Ford
F-150
3.2%
Chevrolet
Silverado 1500
2.8%
Toyota
Camry
2.4%
Honda
Accord
2.2%
Dodge
Ram Pickup 1500
1.9%
Honda
Civic
1.7%
Ford
Explorer
1.6%
Nissan
Altima
1.6%
Jeep
Grand Cherokee
1.6%
Toyota
Corolla
1.5%


Since "Cash for Clunkers" Launched
Make
Model
Share of trade-ins
Ford
F-150
5.5%
Ford
Explorer
5.1%
Jeep
Grand Cherokee
3.4%
Chevrolet
C/K 1500 Series
2.2%
Dodge
Ram Pickup 1500
2.1%
Jeep
Cherokee
2.0%
Ford
Windstar
1.9%
Chevrolet
Blazer
1.9%
Dodge
Grand Caravan
1.8%
Ford
Ranger
1.7%

Edmunds.com analysts have determined that in May and June, the average fuel efficiency of recently purchased new cars was 21.8 miles per gallon. Since the program launched, the average has jumped to 23.2 mpg, a 6.1 percent improvement. Those who participated in the program now earn an average of 24.3 mpg with their new purchases. The average fuel efficiency of trade-ins had been 20.0 mpg prior to the program; that number has dropped 9.0 percent to 18.3. The average clunker trade-in earned 16.1 mpg. As mentioned earlier, 39 percent of all recent trade-ins qualified as clunkers.

"Less fuel-efficient vehicles are being traded in at a faster rate now that the program is in effect, and they will be removed from the road permanently," noted Edmunds' GreenCarAdvisor.com Editor John O'Dell. "This suggests that some environmental benefit has been gained."

Consumers who traded in their clunkers through the program also benefitted financially, generally speaking. Based on preliminary data, Edmunds.com estimates that the average cash value of the traded-in clunkers was $1,475. The owners of those vehicles earned rebates for either $3,500 or $4,500, depending on the replacements vehicles they chose. Edmunds.com Senior Analyst David Tompkins, PhD, points out that many will also save money on gas each month, thanks to their more efficient new purchases.

"This is a tremendous opportunity for certain people, but anyone driving a clunker should really evaluate whether he or she can afford a new car payment that will last a lot longer than the clunker cash," recommends Edmunds.com Senior Consumer Advice Editor Philip Reed.

Car shoppers considering the program can use Edmunds.com's "Cash for Clunkers" calculator to determine their eligibility and better understand the financial benefits they can gain from participating.

"And now, more than ever, it is important for car-buyers to do their research so that they pay a fair price for their new vehicles," notes Reed. "Our analysts have determined that dealers are enjoying a 20 percent increase in gross profit per sale involving a clunker trade-in since the program launched."

About Edmunds Inc. (http://www.edmunds.com/about/)
Edmunds Inc. publishes four Web sites that empower, engage and educate automotive consumers, enthusiasts and insiders. Edmunds.com, the premier online resource for automotive consumer information, launched in 1995 as the first automotive information Web site. Its most popular feature, the Edmunds.com True Market Value®, is relied upon by millions of people seeking current transaction prices for new and used vehicles. Edmunds.com was named "Best Car Research Site" by Forbes ASAP, has been selected by consumers as the "Most Useful Web Site" according to every J.D. Power and Associates New Autoshopper.com Study(SM), was ranked first in the Survey of Car-Shopping Web Sites by The Wall Street Journal and was rated "#1" in Keynote's study of third-party automotive Web sites. Inside Line launched in 2005 and is the most-read automotive enthusiast Web site. CarSpace launched in 2006 and is an automotive social networking Web site. AutoObserver.com launched in 2007 and provides insightful automotive industry commentary and analysis. Edmunds Inc. is headquartered in Santa Monica, California, and maintains a satellite office in suburban Detroit.

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