Cash for Clunkers Program Suspended
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FacebookBig news out of Washington today… Apparently the Cash for Clunkers program has been a bit too popular, and is reportedly being suspended out of fear of running out of money. This program was set to run through November 1st, or until the $1B allotment was used up, and it appears that the money might already be gone.
According to AP reports, nearly 23k vehicles had been sold under the program by late Wednesday, using up nearly $96M of the budget. However, many dealers have reported that large numbers of claims had yet to be processed by the government, thereby prompting the suspension.
According to Bailey Wood, spokesman for the National Automobile Dealers Association, “There’s a significant backlog of ‘cash for clunkers’ deals that make us question how much funding is still available in the program.”
For those that have taken advantage of this program, White House spokesman Robert Gibbs has gone on record that “all valid CARS transactions that have taken place to-date will be honored.”
Assuming that the money truly is exhausted, Congress is looking for ways to extend the program. Thus, it’s quite possible that it will be revived in the coming days. What do you think? Should it be brought back to life? Or should it stay dead?
Published on July 30th, 2009 - 18 Comments
Filed under: Automotive, Economy
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About the author: Nickel is the founder and editor-in-chief of this site. He's a thirty-something family man who has been writing about personal finance since 2005, and guess what? He's on Twitter!
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The Federal government shouldn’t be funding programs like this. It would be a better program if ran by the private sector.
Comment by Nick — Jul 31st 2009 @ 1:11 amThis is hilarious. Why is the government so inefficient. Do we really want bigger and bigger government if they are doing head fakes like this with such a relatively small program? I say no.
Rgds, RB
Comment by RB @ RichBy30RetireBy40 — Jul 31st 2009 @ 2:24 amI looked into the program and I think the idea is great. If I hadn’t sold off my old heap a few years back it would have made for a nice discount on my current vehicle, but oh well.
Texas has a similar program, but it is income based, where part of your purchase is subsidized if you live in an Ozone Non-Attainment area. I think the hardest part is being able to reach the people who have the vehicles that are the most troublesome, folks who have “grey” inspection stickers that they paid a bit extra for or those that just have refused to get it done because they knew it wouldn’t pass. I think the program needs to focus on this aspect more so.
Comment by atamanah — Jul 31st 2009 @ 7:53 amWhere did you get this information? I have only heard it *might* be suspended.
Comment by Chris — Jul 31st 2009 @ 8:49 amHah! If the federal government can’t run something the equivalent of a promotion, what chance do they have of running health care? The Cash-for-clunkers program has infinitely less moving parts than government-controlled health care. Makes you wonder…
Comment by Brent — Jul 31st 2009 @ 10:20 am#4) the source (FoxNews) is linked in nickel’s article.
As for the program in general: this falls easily into the fallacy described in ‘Economics in One Lesson’.
http://jim.com/econ/
Instead of a kid breaking a window, the government has destroyed a quarter million good/working cars. Why are we paying people to destroy assets?
Comment by LOL — Jul 31st 2009 @ 11:10 amThe source is for the figure of 23K vehicles, not the article.
A quote from the “source”:
“a White House official said later the program had not been suspended and officials there were assessing their options.”
The post should be retitled: “Cash for Clunkers Program COULD BE Suspended”.
I’m hopeful they will come up with some way to keep it going.
Comment by Chris — Jul 31st 2009 @ 11:19 am#7) the linked article says there are 23,000 dealerships — and the thought is that all 250,000 cars the program was intended for may have already been completed.
“A survey of 2,000 dealers by the National Automobile Dealers Association found about 25,000 deals had not yet been approved by NHTSA, or nearly 13 trades per store. It raised concerns that with about 23,000 dealers taking part in the program, auto dealers may already have surpassed the 250,000 vehicle sales funded by the $1 billion program.”
**sarcastic** I think the government should immediately start a new ‘cash for ghettos’ program, to pay people to burn down their own houses **/sarcastic**
Comment by LOL — Jul 31st 2009 @ 11:41 amIt’s a victim of its own success. Congress is trying to add 2B to refund it and keep it going but not sure if that will be good idea or not.
Comment by craig — Jul 31st 2009 @ 11:58 amWhy are rewarding people who bought gas guzzlers by giving them a discount on a new car? How the H$%& is encouraging people to buy new cars going to help an economy that has finally imploded from overspending?? Idiots.
Comment by Austin — Jul 31st 2009 @ 12:20 pmI think it’s a great program. It gets the gaz guzzlers off the road and replaces them with more eco-friendly models. It also stimulates the economy by giving people the incentive they need to go out and spend some of the cash they’ve been holding on to out of fear. I really hope they refund the program and keep it going.
Comment by JR — Jul 31st 2009 @ 1:20 pmLooks like the House just approved an additional $2 Billion for this program:
http://www.cnbc.com/id/32235069
If this passes the Senate, then our Government just destroyed 700 thousand cars…
Comment by LOL — Jul 31st 2009 @ 2:43 pmI think they need to at least fund the deals that have been done so far.
Comment by Cat — Jul 31st 2009 @ 5:21 pmWell this sucks for me, cause I was seriously thinking about trading in my ‘01 Jeep. I would have gotten 8-10k off MSRP with that and other deals automakers currently have.
Comment by Tony — Jul 31st 2009 @ 5:34 pmTony, what makes this program laughable is that if you had the brand spanking new 2010 Jeep, it also would qualify as a ‘clunker’ (combined 15/mpg).
Anyhow, don’t consider your car to be ‘traded in’ on this program. The dealer is required to junk / scrap / crush whatever vehicle you bring in — it will not be resold except for it’s weight in metal (2-3 hundred bucks) — so only expect that much when you ‘junk’ your ‘01 jeep.
http://www.fueleconomy.gov/feg.....p;id=28801
Comment by LOL — Jul 31st 2009 @ 6:05 pmThis program is so ridiculous. I live in Texas in a county that has a buyback program similar to the one the Federal Government has. Sure you are getting a car that doesn’t get great fuel economy off the road, but what about all the resources it takes to build a new car? Also is really a good idea to encourage people to take on more debt? That’s what got us into this predicament in the first place.
Just my 2 cents.
Comment by Glenn — Jul 31st 2009 @ 6:28 pmTotally agree with Glenn. What a bunch of BS. The people I see are buying new cars allright most of them foreign and are barely able to pay their bills now. Seems funny to offer such a deal and not try to encourage people to consider an american vehicle. That would probably be too much to ask. We own a 1972 Chevrolet Pickup that I guess the american government would consider a clunker but do not think for a moment we would EVER give her up. Things aren’t made that way anymore in this country! I too live in Texas and it is no wonder this great state wants to secede.
Comment by Jana — Aug 1st 2009 @ 2:24 am@Jana – where are those “foreign” cars built, Tennessee? The Toyotas and Hondas you see were not assembled in Japan and shipped here (though the parts may have been.) The Ford plant here is closed so we can’t buy the trucks they used to make even if we wanted to.
Don’t let the decal on the car fool you, all the big car companies source their product wherever they can do it cheapest.
Comment by Rosa — Aug 2nd 2009 @ 10:39 am