SEPTEMBER 2009

Popular Cash for Clunkers program comes to an end

The United States Transportation Secretary Ray LaHood announced that after a successful run, the Cash for Clunkers program closed on August 24.

“This program has been a lifeline to the automobile industry, jump starting a major sector of the economy and putting people back to work,” Secretary LaHood said. “At the same time, we’ve been able to take old, polluting cars off the road and help consumers purchase fuel efficient vehicles.”

As of August 21, the CARS program recorded more than 457,000 dealer transactions worth $1.9 billion in rebates.

The Car Allowance Rebate System, as it is officially known, has sparked intense interest, filling auto showrooms with buyers and revitalizing manufacturing plants. As a result of the program, automotive inventory has been depleted and both General Motors and Ford are ramping up production, adding shifts and rehiring laid-off workers.

The program has provided rebates of up to $4,500 when people turned in their clunkers for more fuel-efficient vehicles. Most consumers have turned in trucks and SUVs in exchange for passenger cars, with an improved gas mileage of about 60 percent.

Dealers across the United States have complained about not receiving payment from the government for the program. Numerous dealers have had to withdraw from the program because they could not afford to continue advancing funds. Some dealers indicated they were out over a million dollars waiting for reimbursement. The application required by the government is a ten page-plus application.

Dealers were also strongly advised to submit complete applications, which will expedite payment. Dealers will still be able to resubmit rejected applications after the deadline. The Department of Transportation is continuing to expand the number of people processing dealer applications for rebates by adding federal workers to the outside contractors currently at work.