Upstream | July 30, 2009 | 7 comments

'Cash for Clunkers' could be done at midnight.

source: http://www.edmunds.com/insideline/do/News/articleId=153788

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TommyTooThumbs
DETROIT — Transportation Secretary Ray LaHood has alerted key senators that the Cash for Clunkers program is expected to run out of money as early as midnight tonight.

Earlier rumors suggested that the Department of Transportation could make an announcement this evening regarding the status of the Clunkers program and how close the program is to running out of its $1 billion allocation.

If LaHood's concerns are correct, the DOT could announce the program has run out of money completely or could suspend it temporarily while deals in the pipeline are completed and an assessment is made of how much has been spent, Washington sources tell AutoObserver.com.

A DOT spokesman said no announcement is scheduled, but if an announcement is made, it would be posted on the Web site for the Car Allowance Rebate System (CARS).

From the start, the program called for a November 1 expiration or the depletion of the $1 billion in funding. It is clear the program will run out long before November 1 and could run out in a matter of days.

As of Thursday morning, the CARS Web site showed $779 million of the $1 billion remained. The roughly $220 million used represents transactions dealers have submitted for government reimbursement and administrative costs.

But dealers think the CARS.gov gauge is actually on empty. Dealers and dealer organizations are concerned they have far more transactions in the works for consumers to trade their clunkers for more fuel-efficient vehicles than the program has in funds, and dealers will be left holding the bag for the vouchers of up to $4,500 if the government funds run out.

"We don't know what we don't know," said one Washington source about how many deals are in the pipeline versus how much is left in funding.

On Wednesday night, sources said the National Automobile Dealers Association surveyed its dealers to gauge how many Cash for Clunker transactions they had in the works. The average number of working deals for the 1,900 dealers who responded amounted to nearly 14 transactions per dealer, with more deals qualifying for the top $4,500 voucher than the $3,500 voucher.

Of particular concern to dealers is fact that they must destroy the clunker and provide proof it has been destroyed before they can even apply for the government voucher. If the money runs out, the dealers must honor the deal and be out the reimbursement.

Inside Line says: Cash for Clunkers is over nearly before it began. — Michelle Krebs, Editor, AutoObserver.com
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7 comments // 'Cash for Clunkers' could be done at midnight.

  • engineman09
    • 0
      engineman09  

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    • 2 years ago
  • kovadose
  • ALLNATURALVEGANS
  • GodsnLiberals
  • BKsaysAction
  • leahl
    • 0
      leahl  
    • Image

    • More info...

      "As a co-architect of the federal Cash For Clunkers (CFC) program and advisor to various congressional offices on the issue, it is gratifying to see how quickly it has been adopted by the American people. CFC achieves multiple goals -- it stimulates auto sales while increasing the efficiency of the U.S. fleet.

      Congress passed the program in June of this year and it went into effect this past weekend. The $1 billion has now been used up in one week! That translates to more than 250,000 guzzlers and pick-up trucks traded-in for more efficient cars.

      In the original bill, HR 520 and S. 247 the sponsors were aiming for higher efficiency gains. Those gains got watered down in the compromise bill of HR 2751. Now that it is clear how popular this program is I urge Congress to re-up the program with increased mile-per-gallon gaps between the vehicles traded in and bought.

      The Cash for Clunkers program in Germany initially received 1.5 billion euros and when that was used up received another 3.5 billion euros. That translates to a $6 billion CFC program for a country with a much smaller market than the U.S.

      Prior to the CFC program, automakers were selling cars at an annualized rate of 9.5 million vehicles for 2009. That compares with sales of more than 15 million cars only a few years ago. CFC will boost auto sales if we continue the program.

      Given the dire state of the automakers in the US and the need to move away from oil before it spikes back to more than $100 per barrel we should add billions to this program....."

    • 2 years ago
  • larrysnotes
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