• by Karl Greenberg , August 7, 2009

Cash for Clunkers is continuing down the road after a pit stop, now that Congress has voted to pump $2 billion more into the program. The Car Allowance Rebate System (CARS) deal gives owners of cars with 18-mpg rating or below up to $4,500 toward the purchase or lease of a new, more efficient car.

Nissan is responding with a new take on its 8th annual "Bottom Line" Model Year End Sales Event, but this time it's linked to CARS. The effort touts lease and cash offers, but is also intended to get consumers hip to Nissan's lineup of vehicles eligible for CARS. The push runs through August, and adds to Nissan's recent "Nissan Delivers" marketing platform.

For example, the company is offering the 2009 Nissan Altima with $1,500 cash back or a $199-per-month lease and a Nissan Sentra with a $149-per-month lease. The effort is fueled with a new advertising campaign via Nissan's regional-marketing agency Ft. Lauderdale, Fla.-based Zimmerman. Media includes national and cable television spots, national interactive media shopping and search site ads, direct mail and in-dealership support.

Los Angeles-based auto firm Edmunds.com says trade-ins have soared since the CARS "Cash for Clunkers" program launched. The firm says that prior to CARS, 39% of new car sales involved a trade-in. Since then, per the firm, 51% involve a trade-in. Also, prior to the program, 9% of trade-ins were vehicles that would have qualified as "clunkers," while 39% of trade-ins qualify as clunkers since the program launched.

The firm also parsed the CARS market both by vehicles traded in before and after CARS launched, and by vehicles bought through CARS in the same periods. Before CARS, the top ten purchases from trade-in were Ford, Chevrolet, Dodge, Honda and Toyota vehicles, with Ford F-150, Chevy Silverado full-sized pickup; Ford Escape; and Dodge Ram pickup topping the list. Afterward, the mix is around the same.

Edmunds' senior analyst Jessica Caldwell says that despite the expectation that imports would benefit the most from CARS, the mix has been equitable. "I think there was a misconception that imports would be purchased under Cash for Clunkers because Toyota and Honda had the best reputation as fuel-efficient vehicles. But it is a good mix," she says. "There's good dispersion among brands; it's not just one or two brands benefiting."

Still, Edmunds says this might be the wrong time to extend CARS. "When the program originally launched, traffic at dealerships surged because consumers were unsure if it would last very long," said Jeremy Anwyl, CEO of Edmunds.com, in a release. "Now that additional money has been approved, the rush to make a deal will not be as urgent." Anwyl said the program would make more sense in the fall, when sales slow down after the summer sales season.

Caldwell says the activity surrounding CARS won't be anything like the first week, partly because the supply of the most attractive fuel-efficient vehicles is now tight, and people are going to be pickier about what they want. "Right now we are hitting the end of the 2009 model year, so we are getting the tail end of those vehicles. In October, when 2010 models come out, there will be more inventory and higher prices, so it might be better to let the dust settle and study what the response has been," she says.

Consumer Reports, cognizant of the sudden supply shortfall of the most fuel-efficient cars and trucks, is offering its own list of CR-recommended vehicles that qualify. Nissan has five on the list, as do Ford and Honda. Two vehicles on the list are from GM's Chevrolet division; Hyundai has four, and sibling Kia has two. The numerical winner by far is Toyota and its Scion brand with 12 vehicles between them on CR's recommended list for CARS-eligible vehicles.