Hybrid Car Review

Even as J.D. Powers predicts the best month of the year due to the CARS program, the Obama administration is talking to dealers and telling them the program will be winding down, most likely by early September.

J.D. Powers and Associates is expecting August retail sales at slightly more than 1 million units, up nearly 2 percent from one year ago.  This is the first time, if it happens, that sales will have increased year to year since June, 2007.

Given the positive impact of the CARS program, J.D. Power and Associates is increasing its forecast for 2009 to 10.3 million units for total sales. Retail sales are projected to come in at 8.6 million units--300,000 units more than previously expected--while the projection for fleet sales has been reduced to account for a shortage in inventory.

Meanwhile, the Obama administration is making plans to wind down the program. An announcement on the end is expected by tomorrow.

Already 435,000 sales have been made using the Cash for Clunkers program. But dealers are still waiting on the money and are opting out of the program without waiting for the end.

Last night on a new report, one dealer spoke about making over 100 deal with the CARS program, but he still hasn't seen one cent back from the government. He has started to hold up on delivering the vehicles to the new owners until they get a check from CARS. ("Dealers typically borrow money to put new cars on their lots and must repay those loans within a few days of a sale.")  Multiply 100 by $3,500 or $4,500 and you can quickly see why dealers are frustrated with the program.

The program is tripling the number of people processing claims.

In the meantime, despite receiving a lot of summary numbers, the AP and others are still waiting to get their hands on the full list of vehicles being turned in and sold.