Sunday, August 23, 2009

Government Will End Clunker Program Early

"The government will end its popular “cash for clunkers” program on Monday, more than two months early, because it is already running out of money."

"The program, formally known as the Car Allowance Rebate System, or CARS, gives consumers a credit of up to $4,500 toward the price of a new car or truck if they turn in an older vehicle with lower gas mileage. It has generated more than 457,000 sales since July 24, prompting G.M., the Ford Motor Company and other automakers to increase factory output and call back some idled workers."

“It has been successful beyond anybody’s imagination,” President Obama said on Thursday in a radio interview with the syndicated talk show host Michael Smerconish. “And we’re now slightly victims of success because the thing happened so quick, there was so much more demand than anybody expected, that dealers were overwhelmed with applications.”

"As of Thursday, the Transportation Department had repaid dealers just $145 million, or 7 percent of the $1.9 billion that they had requested, leaving many squeezed and prompting some to withdraw from the program early. The government is tripling the size of the work force assigned to handle the applications."

"In many cases, the administration says incomplete forms or errors in the information submitted by dealers are slowing the process. Workers have reviewed about 40 percent of the applications filed, and many have been rejected and then returned to the dealer for possible resubmission."

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