Cash for Clunkers ends, cash for appliances coming soon

The $3 billion "Cash for Clunkers" program officially ends today, having helped generate at least 625,000 new car sales. Hoping to repeat this success, Energy Secretary Steven Chu has announced that $300 million in stimulus money will go toward cash incentives for consumers to buy energy-efficient home appliances:

Beginning late this fall, the program authorizes rebates of $50 to $200 for purchases of high-efficiency household appliances. The money is part of the broader economic stimulus bill passed earlier this year. Program details will vary by state, and the Energy Dept. has set a deadline of Oct. 15 for states to file formal applications. The Energy Dept. expects the bulk of the $300 million to be awarded by the end of November. (Unlike the clunkers auto program, consumers won't have to trade in their old appliances.)

"These rebates will help families make the transition to more efficient appliances, making purchases that will directly stimulate the economy," Energy Secretary Steven Chu said in a statement announcing the plan. Only appliances covered by the Energy Star seal will qualify. In 2008, about 55% of newly produced major household appliances met those standards, which are set by the Energy Dept. and Environmental Protection Agency.

Replacing old appliances can significantly reduce a household's energy use and utility bills, so this seems like a good use of stimulus money. However, some analysts are skeptical that the new program will be as successful as "Cash for Clunkers":

"The cash-for-clunkers (program) had a discernible value proposition for the consumer, because he knows how much his (clunker) is worth," says [Sam] Darkatsh, the Raymond James analyst. "With appliances, there is no trade-in. You can walk into Home Depot and get a great deal on a home appliance any time you want one. Why would it drum up sales now?" Laura Champine, an analyst with Cowen & Co., agrees. "I'm not sure if it will be as powerful as cash for clunkers because there is something compelling about that $4,500 discount," she says. "Also, a new car is more fun than a new dishwasher. So I'm not sure if it will be as much of a driver, but any driver is welcome right now."

Share any relevant thoughts in this thread.

Tags: American Reinvestment and Recovery Act, Bruce Braley, Car Allowance Rebate System, cars, Cash for Clunkers, Economic Stimulus, Economy, energy efficiency, home appliances, Steven Chu, stimulus bill (all tags)

Comments

7 Comments

CFFUTEE

I'm still waiting for the "Cash for fucking up the entire economy" program.

Oh, wait, we already had two of those (TARP & TARPII).

by the mollusk 2009-08-24 08:29AM | 0 recs
Re: Cash for Clunkers ends

I didnt like Cash for Clunkers. I dont like this new one either. Very marginal benefit for the amount of grief they will get from opponents.  Plus there was plenty of confusion documented in the papers.  Hey, maybe if we cut down on that, we will have a lot more money to fund these kind of marginal programs.

So far our party is doing a crappy job of reducing war spending.Looks like the Democratic Party is part of the military industrial complex. Was Eisenhower the last gutsy president to call them on it?

by Pravin 2009-08-24 09:12AM | 0 recs
Re: Cash for Clunkers ends, cash for appliances

Cash for Clunkers was a good idea, they just didn't realize there was so much pent up demand for cars.  People knew it was coming, and waited to buy.  Say what you will about the U.S., when it comes to free money, our citizens stay informed!

As far as I am concerned, Cash for Clunkers has been very successful.

by agpc 2009-08-24 01:10PM | 0 recs
I'm glad most people

who used the program did trade in their clunkers for cars (the way the law was written, they could have traded in SUVs for SUVs that got only 4 mpg better).

My big question is whether we have mainly borrowed against future demand for cars, compressing a lot of purchases that would have happened during the coming year into this summer.

by desmoinesdem 2009-08-24 01:15PM | 0 recs
Re: I'm glad most people

I used the program and can say that in my case, had the program not been around, I wouldn't have bought a new car anytime soon.  I would have driven the old clunker into the ground.  She had at least a few good years left.

So, for me, it did spur me to spend where I wouldn't have spent otherwise...

by LordMike 2009-08-24 07:49PM | 0 recs
More wasted tax dollars

Cash for clunkers was a bad idea as is cash for appliances. All you sare doing is transfering taxpayer dollars from one hand to the other. While some take advantage of the cash, that money doesnt come frm thin air, it comes from other hard working taxpayers. In addition, havent we already done enough to bail out automakers? And considering that more foreign cars (japanese) were purchased with cash for clunkers, how did that help US automakers?

Now cash for appliances....well since appliances arent manufactured by US companies and are built overseas for the most part how does that help US manufacturers. And why are we now going to transfer more of my tax money into the hands of someone else so they can buy a refrigerator. What's next? Maybe Cash for Doors and Windows? Cash for solar attic fans? When does it end. Wasted taxpayer dollars. They screwed up with TARP and auto bailout and they are pissing away money with this.

Althewhile budget projections for the next 4 years are getting worse and health care reform is tanking because Americans see we are spending with no end in site.....

by BuckeyeBlogger 2009-08-24 02:41PM | 0 recs
I like it

I think this well actually be great. It's not new spending, already appropriated, and probably will have a multiplier effect, like "Cash for Clunkers", not a big multiplier, but one none the less.

by NJDEM1 2009-08-25 01:59PM | 0 recs

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