U.S. auto sales plunged in September as the spending binge inspired by the government's $3 billion "Cash for Clunkers" program ended and the rate of sales dropped below its level before the initiative started.
Company officials and industry analysts likened the post-Clunkers phase to a hangover. As the monthly sales numbers were reported Thursday, it became clear that some of the gains of August had merely been borrowed from September.
Chrysler's sales dropped 42 percent from a year ago. Ford's sales dropped 6 percent. General Motors' sales dropped 45 percent.
"We expected there would be payback," said Mike DiGiovanni, GM's director of global market analysis. "We're not going to be out of the woods for a while until the job market recovers."
It is still an open question among economists how effective the incentive was in creating sales that would not have happened anyway.
Nearly 700,000 cars were sold under the Clunkers program, which gave consumers vouchers worth up to $4,500 for trading in older gas guzzlers for newer, more fuel-efficient models. Some experts say that at least some of those trade-ins probably would have happened anyway.
The White House Council of Economic Advisers estimated that the stimulus program will raise car sales for the year by 330,000, but reports from other groups put the figure both higher and lower.
"In a long-term theoretical sense, Cash for Clunkers doesn't do a whole lot for the economy," said Zach Pandl, an economist at Nomura Securities. "But it did instill a sense of confidence that we can exit this recession."