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DETROIT — It had been a dismal July in dealer showrooms — as bad as every month so far this year.

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House Votes for $2 Billion Fund to Extend ‘Clunker’ Plan (August 1, 2009)
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Uli Seit for The New York Times
Dozens of clunkers have been dropped off at A&J Scrap Metal in Richmond Hill, Queens.

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J. Emilio Flores for The New York Times
Trade-ins have kept Brian Allan, a manager at Galpin Motors in Van Nuys, Calif., busy.
But then the federal cash-for-clunkers program kicked in six days ago, igniting the kind of sudden interest in car shopping not seen since zero-percent financing revived industry sales after the Sept. 11 terrorist attacks.

Analysts predicted Friday that July sales of new vehicles, which manufacturers will report on Monday, would be about 11 percent higher than June sales. Most of that jump will be owed to the cash-for-clunkers program, they said.

“I don’t think anybody expected the program to be this popular,” said Greg Martin, a spokesman for General Motors. “There’s no doubt it has jump-started sales.”

The program provides up to $4,500 for the purchase of a new, more fuel-efficient vehicle, provided the trade-in is old enough and qualifies as a gas-guzzler.

The annualized sales rate, used to calculate the strength of the market, could top 11 million vehicles in July — that would be the highest rate since auto sales began plummeting late last year.

The $1 billion program, which can finance about 225,000 clunker trade-ins, may receive another $2 billion in government funding.
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nytimes.com

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