Germans Do Better with ’Cash for Clunkers’

Germans Do Better with ’Cash for Clunkers’

In the race to see who can incentivize consumers best to trade in their foul emitting, gas guzzling clunkers, the award goes to Germany. Its 5 billion Euro incentive program for new car buyers ran out early Wednesday and the government estimates some 2 million old cars were exchanged.

“Cash-for-Clunkers” programs surged in popularity across Europe after France introduced the idea in December 2008. Germany, Italy, Britain, Romania, Austria, the Netherlands, Spain and Serbia have had their own versions aimed at shoring up local automakers.

In Germany, the program paid consumers a 2,500 Euro bonus to scrap cars at least nine years old in exchange for cleaner, more fuel efficient new ones.

The German program, launched in March, was credited with strongly boosting sales and, in April, the government decided to expand the program’s funding to 5 billion Euros ($7.1 billion) from 1.5 billion Euros. Unlike the U.S. government, however, it did not require that vehicles traded in be disabled and the reimbursement procedure to franchise dealers reportedly was much simpler.

According to Germany’s car importers association, VDIK, the Cash-for-Clunkers program played a major role in boosting German car sales to 1.7 million units in the first eight months of 2009 — double the number in 2008.