The unexpected success of the government's "cash for clunkers" program is boosting sales dramatically -- but is probably pulling forward some purchases that would have taken place next year.

Forecasting firm IHS Global Insight has increased its U.S. auto sales estimate for this year because of the robust response to the government-funded plan. But it is paring its 2010 forecast.

George Magliano, director of North American auto industry research at IHS, said the annualized selling rate this month has spiked above 12 million cars and light trucks, after languishing below 10 million for most of the year.

Although Magliano expects the selling pace to fall back after the funds for the incentives run out, IHS has raised its full-year sales forecast to 10.3 million light vehicles from 9.8 million previously.

But IHS is shaving its 2010 sales forecast to 11.1 million from 11.3 million, reflecting the anticipated "payback" from the incentives-fueled boom.

"It's not until 2012 where we start to approach the level where we fell from," Magliano said.

Last year, sales declined to 13.2 million cars and light trucks, down from 16.1 million in 2007. A deep recession has pushed demand for autos this year to the lowest level since the 1980s.

Encouraged by the impact of scrappage programs introduced in several European countries early in the year, the U.S. government launched a $1 billion program, and then extended it by adding a further $2 billion.

The program, officially known as the Car Allowance Rebate System, gives consumers vouchers for up to $4,500 if they turn in old gas-guzzlers and buy more fuel-efficient models. In addition to stimulating demand, such programs benefit the environment by getting some of the most polluting cars off the road.

Toyota Motor Corp. has sold the most vehicles under the program, followed by General Motors Co., Ford Motor Co. and Honda Motor Co., according to the U.S. Department of Transportation. It said the Toyota Corolla compact topped the list of models purchased with "cash for clunkers" incentives.

"Cash for clunkers is helping" to lift sales out of the trough, Magliano said, "but the market really needs the economy to return to health."

Among the factors weighing on demand, credit is still not available for subprime borrowers and auto loan delinquency rates are rising. "That's a new negative we're living with," he said.

In addition, the decline in employment will persist into 2010, and housing prices are very low and recovering slowly.

Under IHS Global Insight's base scenario, auto sales are expected to top 15 million in 2012 and rise to about 17 million in 2014. Its worst-case scenario envisages a much slower recovery, with the market not hitting 15 million vehicle sales until 2014.

Even before the incentives were introduced, Toyota sales executives predicted the U.S. auto market would be stronger in the second half of the year.

But they said recently that they remain cautious in their outlook because of the high U.S. jobless rate.

The sudden surge in sales has led several automakers, including Ford, to ramp up production. About 340,000 vehicles have been bought under the program, with about 20,000 new sales submitted each day this week.

Ford's chief economist, Ellen Hughes-Cromwick, expects between 700,000 and 750,000 vehicles to be sold before the program runs out of money.

GM's vice president of sales, Mark LaNeve, said the program had boosted overall industry sales 30 percent to 40 percent, counting "increased sales from the interest and traffic, not just clunkers."

IHS Global Insight estimated the program would increase sales this year by 600,000 vehicles -- with about 400,000 of those being pulled forward from the last part of this year and 2010.