Government ‘Cash for Clunkers’ Program Too Successful – Going Broke

July 31, 2009

(ChattahBox) — The new much-heralded government incentive program ‘Cash for Clunkers’ program was supposed to last until the end of October—but on Thursday, less than one week after its launch, the program may be halted.  Apparently it burned through the $1 billion allocated for it in six short days. Transportation Department officials called lawmakers earlier Thursday to alert them of plans to suspend the program as early as Friday. But a White House official said later the program had not been suspended and they were reviewing their options to keep the program funded, according to the AP. The program officially dubbed the ‘Car Allowance Rebate System‘ was signed into law in June, and started July 25th and was supposed to run until Nov. 1 or until the $1 billion was burned up.

To qualify for a voucher, buyers are/were to trade in a in drivable vehicle manufactured in 1984 or later, rated at no more than 18 miles per gallon combined city and highway mpg as rated by the Environmental Protection Agency when new, and buy or lease a new car that gets at least 22 mpg. All imports and domestics with a list price under $45,000 were eligible, as long as they meet fuel economy standards of at least 22 mpg for cars; 18 mpg for SUVs, small pickups and minivans; and 15 mpg for large vans and trucks.

A new car with a 4-mpg improvement in fuel economy qualified for a $3,500 voucher. Cars capable of 10-mpg improvement qualify for $4,500. The eligibility requirements were different for trucks. Owners need to prove their trade-ins have been registered and insured throughout the past 12 months. There is a limit of one trade-in per owner under the program, with the credit applying to the lease or purchase of a single new vehicle. The program will last  is spent, whichever comes first. To get older, less-fuel-efficient vehicles off the road the program requires trade-ins to be junked, and the rules include elaborate procedures that dealers must follow to permanently disable the engines of clunker trade-ins so they can’t be resold.

The government estimates the $1 billion program will generate sales of 250,000 vehicles at the nation’s 19,700 new-car dealers. If the anticipated sales were spread evenly among all the dealerships, it would amount to about 12 cars per dealer. The official government website for the programs is www.cars.gov. The government has also set up a hotline at (866) 227-7891.

Update: The U.S. House approved an emergency measure to add $2 billion to the “cash for clunkers” automobile purchase program.


Comments

2 Responses to “Government ‘Cash for Clunkers’ Program Too Successful – Going Broke”

  1. Drew on July 31st, 2009 10:49 am

    Read this article: The Real Reason for the “Cash for Clunkers” Suspension. The ex car salesman blog shares exactly why they stopped the program. Even reports that some sales managers are calling asking for the money back because they were denied the rebate when the final paperwork was submitted but their car was already ruined by dumping a solution in the engine. They now have no car. Scary. See: http://tinyurl.com/ml9sdo

  2. Valuable Internet Information » Government ‘Cash for Clunkers’ Program Too Successful - Going Broke on July 31st, 2009 2:32 pm

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