The reality of Government money for your gas guzzling junker is coming to an end! If you’re into that sort of thing you better act while there is still time…
If you are planning to take advantage of the possible $4,500 new car credit the U.S. government rushed to make available, you may want to hop in your clunker and buzz that gas guzzler straight over to the nearest dealer sooner rather than later.
According to a recent announcement by U.S. Transporation Secretary Ray LaHood – the $3 billion government sponsored — taxpayer funded — CARS program, dubbed “Cash for Clunkers” will be coming to an end this coming Monday, Aug. 24, at 8pm EST. Lahood also offered this blurb in his “wind-down” strategy:
As of 6 AM on Thursday, more than 450,000 transactions have been submitted by dealers, representing a total of about $1.9 billion. This represents approximately 2/3rds of the $3 billion allocated to the Department of Transportation to operate the CARS program. Based on conservative estimates of valid deals transacted under the program, DOT has projected that the program will be able to continue to accept new submissions until the Monday deadline, consistent with the statutory authority of the program.
Unlike the first time the cash for clunkers program ran out of money, this time it appears the end has truly arrived.
Just like any other government program, there have been a few hiccups along the way.
- Many are upset over the fact the junkers have to be destroyed. There has not been a solid explanation for this to date and that lack of transparency has led many to believe the motivation is less than honorable.
- Though the cars are selling like hotcakes, government money is not flowing back into the dealerships at the same speedy rate. Fronting money has become such a problem that some dealers have been forced to withdraw from the program completely due to lack of funds.
- Charitable organizations that normally benefit from the donation of older vehicles are suffering because of the unprecedented wastefulness of this government program.
Despite all the problems, the cash for clunkers program can’t be all bad… right? Somebody had to benefit… right?
Who benefited most?
According to statistics, although the Ford Focus was the top vehicle purchased, the next 4 in line were the Toyota Corolla, Honda Civic, Toyota Prius, and Toyota Camry. This means the bulk of consumer money went to companies based largely outside of the U.S. economy. The varying roles each of these companies play in our economic recovery would make for an interesting debate… and one I’m sure many Americans would love to hear!
Though demands for vehicles from GM and Ford are lower than those of their foreign counterparts, both American auto giants have bolstered production to meet the increased demands — which many fear will be short lived. How long will this production hike last? No one knows for sure, but many agree the predominate sound heard at auto dealerships after the Monday deadline will be the peaceful chirping of crickets.
Whether or not you believe the C.A.R.S. program is profitable or just another example of wasteful government mismanagement, if you are looking to participate you better get moving!