Cash for Clunkers extension signed into law
President Obama signed into law a bill passed late Thursday night to extend the popular program aimed at boosting auto sales.
WASHINGTON (CNNMoney.com) -- President Barack Obama signed a bill Friday morning that breathes new life into the popular Cash for Clunkers program.
"Now, more American consumers will have the chance to purchase newer, more fuel efficient cars and the American economy will continue to get a much-needed boost," President Obama said in a statement.
The move extends the Cash for Clunkers program that had burned through its initial $1 billion in funding in its first week.
The Senate had voted 60-37 to approve an additional $2 billion for the program late Thursday evening, in a rush to finish business before their August recess. The House had already voted to extend the program last Friday.
"This will be a great weekend to go out and buy an American made auto," Sen. Debbie Stabenow, D-Mich. said in a press conference after the Thursday night vote.
During the debate, Senate Republicans offered a half dozen amendments to the program. One would have banned all future bailouts and another would have provided tax credits to spur more home sales.
But Sen. Carl Levin, D-Mich., warned that any attachments would bounce the bill back to the House, delaying the program until after the summer break in September.
Although the vote mostly went along party lines, seven Republicans voted for it and four Democrats voted against the measure.
Getting enough Senate votes to extend the program was no easy task. Levin said late Thursday that this clunkers extension is likely the last Congress is willing to give.
"Never say never, but at this point, this is probably the extent of the program," he said.
Under the Clunkers program as enacted, vehicles purchased after July 1 are eligible for refund vouchers worth $3,500 to $4,500 on traded-in gas guzzlers. The trade-in vehicle has to get a combined city and highway fuel economy rating of 18 miles per gallon or less.
According to government figures, compact cars and hybrids have been the top sellers so far.
With at least $775 million already spent, the kinds of autos flying off the lots include the Ford Focus, Toyota Corolla and Ford Escape. The government and an independent analysis by Edmunds.com show different results for which cars and trucks are the top sellers.
The sales results indicate that consumers are buying more fuel-efficient vehicles than most people expected. The average combined city and highway fuel economy of the 10 cars ranges from at 27 to 33 miles per gallon, depending on which versions people choose.
While critics had feared that car shoppers would use the program mostly to buy trucks, in fact 83% of the vehicles traded in have been trucks and SUVs while 60% of vehicles purchased were passenger cars, according to Secretary of Transportation Ray LaHood.
The broad category of SUVs includes many small car-like crossover SUVs, including the Escape.
Last month, many of the vehicles with the biggest reported year-over-year sales gains were small crossovers, a fact that several of the top automakers attributed to the Cash for Clunkers program.
The average fuel economy of new vehicles being purchased under Cash for Clunkers is 25.4 mpg, LaHood said, and the average fuel economy increase from the old vehicle to the new is about 61%.
--CNN congressional correspondents and White House senior correspondent Ed Henry contributed to this report.
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