Interest in Cash for Clunkers sputters
In 'Gold Rush mentality,' demand for cars peaked in July and could fall to pre-Clunkers levels next week, report says.
NEW YORK (CNNMoney.com) -- After sparking an initial rush to showrooms, the Cash for Clunkers program seems to be running out of fuel.
Interest in Cash for Clunkers has fallen 15% since its peak, and the number of people planning to buy cars could fall to pre-Clunkers levels by next week, an auto research group said Tuesday.
Under the Clunkers program, which launched July 27, vehicles purchased after July 1 are eligible for refund vouchers worth $3,500 to $4,500 on traded-in cars with a fuel economy rating of 18 miles per gallon or less.
The program proved wildly popular, running through its initial $1 billion in its first week and leading lawmakers to approve an additional $2 billion in funding on August 7.
But interest in the program peaked on July 29, and demand has waned, according to the report from Edmunds.com.
The report, which cited Internet shopping data, said if current trends continue auto purchase intent will fall back to pre-Cash for Clunker levels by August 20.
The original money set aside for Clunkers "was very low in relation to the size of the auto market," said Michelle Krebs, senior analyst at Edmunds.com, in a prepared statement. "This created a Gold Rush mentality where consumers hurried to take advantage before funding ran out."
The additional $2 billion in funding removed the urgency to participate, Krebs said.
Still, the report predicted auto sales will improve over the summer as customers bargain-hunt before new models hit the showroom.