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</script>  </td> </tr> <tr> <td>  <script type="text/javascript"> GA_googleFillSlotWithSize("ca-pub-0200629403145096", "CA_FinanceBTFLeftSky160x600", 160, 600); </script>  <br><br>  <script type="text/javascript"> GA_googleFillSlotWithSize("ca-pub-0200629403145096", "LowerLeftROS", 160, 600); </script>  <br><br> </td> </tr> </span> </table>  </td> <td width="430" valign="top"> <p class="small"><strong>By Mark Huffman <br>ConsumerAffairs.com</strong></p><p><em>August 3, 2009 </em> <br><table cellspacing="2" cellpadding="2" border="0" bgcolor="#eeeeee" align="right" width="140"> <tr bgcolor="#ffffff"> <td><p class="tiny"> <img src="/web/20100104231417im_/http://consumeraffairs.com/images02/clunkers.jpg"><br>  <a href="/web/20100104231417/http://consumeraffairs.com/news04/2009/08/clunkers_cash20.html">Cash For Clunkers Wraps Up With Nearly 700,000 Car Sales</a><br>  <a href="/web/20100104231417/http://consumeraffairs.com/news04/2009/08/clunkers_cash19.html">Cash for Clunkers Gets One-Day Extension</a><br>  <a href="/web/20100104231417/http://consumeraffairs.com/news04/2009/08/clunkers_cash18.html">Consumer Groups Warn of Dealer Double-Dipping In Cash For Clunkers</a><br>  <a href="/web/20100104231417/http://consumeraffairs.com/news04/2009/08/clunkers_cash17.html">Cash for Clunkers Ends Monday Night, Feds Decree</a><br>  <a href="/web/20100104231417/http://consumeraffairs.com/news04/2009/08/clunkers_cash17.html">Dealers Want to Scrap Cash for Clunkers Program</a><br>  <a href="/web/20100104231417/http://consumeraffairs.com/news04/2009/08/clunkers_cash16.html">Is a New Engine a Good Option For Your Clunker?</a><br>  <a href="/web/20100104231417/http://consumeraffairs.com/news04/2009/08/clunkers_cash15.html">New York Cites Dealers For "Clunkers" Deception</a><br>  <a href="/web/20100104231417/http://consumeraffairs.com/news04/2009/08/clunkers_cash14.html">NHTSA: "Cash For Clunkers" Going Great Guns</a><br>  <a href="/web/20100104231417/http://consumeraffairs.com/news04/2009/08/clunkers_cash13.html">"Cash For Clunkers" Information Sought By Public Citizen</a><br>  <a href="/web/20100104231417/http://consumeraffairs.com/news04/2009/08/clunkers_cash12.html">Cash For Clunkers Success A Positive Economic Sign</a><br>  <a href="/web/20100104231417/http://consumeraffairs.com/news04/2009/07/clunkers_cash12.html">"Cash For Clunkers" Gets $2 Billion To Keep Rolling</a><br>  <a href="/web/20100104231417/http://consumeraffairs.com/news04/2009/07/clunkers_cash11.html">White House: Clunkers Going Strong</a><br>  <a href="/web/20100104231417/http://consumeraffairs.com/news04/2009/07/clunkers_cash10.html">"Cash For Clunkers" Suspended</a><br>  <a href="/web/20100104231417/http://consumeraffairs.com/news04/2009/07/clunkers_cash9.html">Transportation Secretary Kicks Off "Cash For Clunkers" Program</a><br>  <a href="/web/20100104231417/http://consumeraffairs.com/news04/2009/07/clunkers_cash8.html">AGs Worry About Cash For Clunkers Scams</a><br>  <a href="/web/20100104231417/http://consumeraffairs.com/news04/2009/07/clunkers_cash7.html">Cash-for-Clunkers: Be A Smart Consumer</a><br>  <a href="/web/20100104231417/http://consumeraffairs.com/news04/2009/07/clunkers_cash6.html">Not a Scam, Clunker Site Insists</a><br>  <a href="/web/20100104231417/http://consumeraffairs.com/news04/2009/06/clunkers_cash5.html">Obama Signs 'Cash for Clunkers' Bill</a><br>  <a href="/web/20100104231417/http://consumeraffairs.com/news04/2009/06/clunkers_cash4.html">Watch Out For Fake "Cash For Clunkers" Scams</a><br>  <a href="/web/20100104231417/http://consumeraffairs.com/news04/2009/06/clunkers_cash3.html">Senate Passes 'Cash For Clunkers' Bill</a><br>  <a href="/web/20100104231417/http://consumeraffairs.com/news04/2009/06/clunkers_cash2.html">'Cash For Clunkers' Bill Rolls On</a><br>  <a href="/web/20100104231417/http://consumeraffairs.com/news04/2009/06/clunkers_cash.html">House Passes "Cash For Clunkers" Bill</a><br> ---<br>  <a href="/web/20100104231417/http://consumeraffairs.com/news_index/automotive.html">Automotive News</a><br> </p></td> </tr> </table> The U.S. economy may be in much better shape than anyone thought, and the government's Cash for Clunkers program may be the proof.</p> <p>The program, modest by Washington standards, began last week, offering consumers up to $4,500 if they would trade in their gas-guzzler on a new, fuel efficient car or truck. There were a lot of caveats and conditions, meaning consumers had to pay attention.</p> <p>For example, the amount of the government subsidy was dependant on the gas mileage differential between the vehicle being traded and the new one being purchased. The greater that differential, the higher the subsidy. So consumers had to do a little homework before deciding to trade in their clunker and head for the new car lot.</p> <p>But head for the car lot they did, in huge numbers. Within four days of starting the program, the government had run out of its allotted cash. The White House found itself in a public relations snafu when it was initially reported the wildly popular program was being suspended, but the House quickly appropriated an extra $2 billion. The extra money requires approval by the Senate.</p> <h3>Impressive sales</h3> <p>Lost in the dust-up over whether the White House suspended the program or it didn't is the fact that U.S. consumers purchased new automobiles last week in staggering numbers, after all but abandoning new car showrooms in the last eight months. Sales figures are not yet available, but anecdotal evidence suggests the sales tally will be impressive.</p> <p>At King's Toyota in Cincinnati, small fuel-efficient models flew off the lot. Managers said their inventory was nearly cleaned out.</p> <p>"It's been awesome, unbelievable," sales manager Greg Walker told WLWT-TV.</p> <p>Other car dealers around the country reported similar experiences. Consumers brought in older cars that might bring $400 or less on a trade-in and were able to turn it into a $3,500 to $4,500 down payment on a new vehicle. </p> <p>Yes, the government was handing out thousands of dollars, but consumers also had to come up with another $12,000 to $15,000 in cash, or take out a loan for that much. The fact that they were willing - and able - to do so suggests that much about this recession may be psychological as well as economic.</p> <p>With all the talk of the last eight months about the plight of the economy, it's fair to assume that many consumers have been fearful of spending money on a major purchase. Many obviously had the means, but were held back by fear about the economy.</p> <h3>Game-changer</h3> <p>While the Cash for Clunkers program may have the short term benefit of helping car dealers clear their crowded inventory, its more lasting value perhaps could be as a psychological game-changer. Fear's spell over the U.S. consumer may be breaking.</p> <p>Even people still caught in the grip of the recession appear to be shaking off the fear and taking advantage of the program to buy a new car. The Wall Street Journal reports that James Dunn, newly laid off from his job at a South Carolina manufacturing plant, used his severance check and his 1989 pick-up to get a new truck. Even though he's now out of work, he doesn't seem all that worried.</p> <p>"The economy is picking up," Dunn told the Journal. "Seems like it, anyway." <h3>Some complaints</h3> <p>Not everyone is happy with the clunkers program. In Cape Coral, Fla., a ConsumerAffairs.com reader complained that some consumers -- and dealers -- were abusing the program.</p> <p>"A woman interviewed (on a local TV news program) said she had to have her car towed in because it didn't run," Donald of Cape Coral complained. "Isn't this an abuse of the program. If they are doing this what else are they doing to violate rules?"</p> <p>On New York's Long Island, a consumer said he lost his $5,000 deposit when his clunkers deal with Habberstad Nissan fell through.</p> </p> <br><br> <div align="center">  <script type="text/javascript"> aster_cloud_id = '2417581'; aster_cloud_format = '430x280'; </script> <script type="text/javascript" src="https://web.archive.org/web/20100104231417js_/http://web.asterpix.com/media/js/searchlight.js"></script>  </div> <p class="tiny"><strong><a href="/web/20100104231417/http://consumeraffairs.com/php/a_report.php">Report Your Experience</a></strong> <br>If you've had a bad experience -- or a good one -- with a consumer product or service, we'd like to hear about it. All complaints are reviewed by class action attorneys and are considered for publication on our site. Knowledge is power! 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Batteries</a></li> <li><a href="/web/20100104231417/http://consumeraffairs.com/news04/2010/01/oh_carfax.html">Ohio Appeals Court Rejects Class-Action Settlement With Carfax</a></li> <li><a href="/web/20100104231417/http://consumeraffairs.com/news04/2010/01/taping_calls.html">How To Tape Customer Service Calls</a></li> <li><a href="/web/20100104231417/http://consumeraffairs.com/news04/2010/01/nj_fda_cheese.html">FDA Seeks Shutdown On New Jersey Cheese Plant</a></li> <li><a href="/web/20100104231417/http://consumeraffairs.com/news04/">More News ...</a></li> </ul> <div align="center"> <p class="red" align="center"><strong>SAFETY RECALLS</strong></p> </div> <ul> <li><a href="/web/20100104231417/http://consumeraffairs.com/recalls04/2009/dorel_playyard.html">Safety 1st Disney, Eddie Bauer Portable Play Yards</a></li> <li><a href="/web/20100104231417/http://consumeraffairs.com/recalls04/2009/corvette.html">Corvettes with Removable Roofs</a></li> <li><a href="/web/20100104231417/http://consumeraffairs.com/recalls04/2009/equinox.html">GM Equinox, Terrain Models</li> <li><a href="/web/20100104231417/http://consumeraffairs.com/recalls04/2009/audi_q5.html">2009 Audi Q5</li> <li><a href="/web/20100104231417/http://consumeraffairs.com/recalls04/2009/lg_dehumidifier.html">LG Portable Dehumidifier</li> <li><a href="/web/20100104231417/http://consumeraffairs.com/recalls04/2009/kendamaspot.html">Kendamaspot Japanese Wooden Skill Toys</li> <li><a href="/web/20100104231417/http://consumeraffairs.com/recalls04/2009/dollar_tree_knives.html">Dollar Tree Tool Bench Utility Knife</a></li> <li><a href="/web/20100104231417/http://consumeraffairs.com/recalls04/2009/vintage_verandah.html">Vintage Verandah Patio Fireplaces</a></li> <li><a href="/web/20100104231417/http://consumeraffairs.com/recalls04/2009/cressi.html">Cressi Scuba Regulators</a></li> <li><a href="/web/20100104231417/http://consumeraffairs.com/recalls04/2009/ikea_leopard.html">IKEA LEOPARD Highchairs</a></li> <li><a href="/web/20100104231417/http://consumeraffairs.com/recalls04/2009/511_tactical.html">5.11 Tactical Knives</a></li> <li><a href="/web/20100104231417/http://consumeraffairs.com/recalls04/2009/polaris_atv.html">Polaris Sportsman ATVs</a></li> <li><a href="/web/20100104231417/http://consumeraffairs.com/recalls/recalls.htm">More Recalls ...</a></li> </ul> <div align="center">  <script type="text/javascript"> GA_googleFillSlotWithSize("ca-pub-0200629403145096", "CA_FinanceBTFRightRect300x250", 300, 250); </script>  </div> <div align="center"> <table width="320" cellpadding="4" cellspacing="4" bgcolor="#eeeeee"> <tr>  </td> </tr> <tr> <td bgcolor="#ffffff" valign="top" align="left" colspan="2"> <p class="red" align="center"><strong>MOST-VIEWED PAGES</strong></p> <p class="tiny" align="left"> <ul> <li><a href="/web/20100104231417/http://consumeraffairs.com/news04/2009/02/amish_heaters.html">Amish Heaters</a></li> <li><a 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