Update 8/21/2009 – Cash for Clunkers ends Monday
Update 7/31/2009 at 3pm EST – Deadline Extended!
Will cash for clunkers come back? Yes. Apparently it will…
New developments in the continuing drama surrounding the Cash for Clunkers (CARS) program being suspended. Earlier today the York Daily Record (an AP affiliate) reported that the House approved a “rush vote” to reinstate the program by funding it an additional $2,000,000,000!
Here is a snippet from the original article:
WASHINGTON (AP) — The House has voted to rush an additional $2 billion into the popular but financially strapped “cash for clunkers” car purchase program.
The bill was approved on a vote of 316-109. House members acted within hours of learning from Transportation Secretary Ray LaHood that the program was running out of money.
Called the Car Allowance Rebate System, or CARS, the program is designed to help the economy and the environment by spurring new car sales. Car owners can receive federal subsidies of up to $4,500 for trading in their old cars for new ones that achieve significantly higher gas mileage.
House Majority Leader Steny Hoyer said the new money for the program would come from funds approved earlier in the year as part of an economic stimulus bill.
This is a breaking news update. Check back soon for further information.
Whether this is good news or bad news depends on your point-of-view. Personally I find it rather troubling – our tax dollars seem to be treated as if they grow on trees. I would rather see the government reconsider the entire program and stop meddling with the market.
Cash For Clunkers suspended after only 4 days!
For the last four days people have been flocking to dealerships to turn in their GM, Ford, Chrysler, Toyota, or any other auto manufacture vehicle for cash! The term “Clunker Cash” has been sweeping across the country with reckless abandon.
Where you able to trade in your clunker for cash before the deadline? Some people would call you lucky. Others would say the entire program was a big waste of time and money, claiming dealers raised vehicle prices to cover the difference anyway. Whatever your opinion… the program has been suspended.
Why was it suspended?
According to the Detroit Free Press:
The decision to suspend the plan came after auto dealers warned the government today that it was in danger of losing track of how many trades had actually been made.
The plan offering owners of old cars and trucks $3,500 or $4,500 toward a new, more efficient vehicle has proven wildly popular, with 22,782 trades certified by federal officials since Monday. But the National Highway Traffic Safety Administration told dealers Wednesday that a vast majority of transactions submitted were being rejected for incomplete or illegible paperwork.
A survey of 2,000 dealers by the National Automobile Dealers Association, the results of which were obtained by the Free Press, found about 25,000 deals not yet approved by NHTSA, or about 13 trades per store. With 23,005 dealers asking to be part of the program, auto dealers may have already arranged the sale of more than the 250,000 vehicles that federal officials expected the plan to generate.
Auto dealers across the country were scrambling to help customers who were frantically trying to get their deal pushed through. One dealer in Bloomington Hills, MI said it was working so well his customers were becoming angry if he couldn’t get to them in time!
Frantic customers were not their only concern… auto dealers were also worried that the program would not last long, apparently they had the inside scoop as to how many cars and how many days it would take before the whole system came to a screeching halt.
Will the Cash for Clunkers (CARS) program come back?
That is the question on a lot of people’s minds! Will the incredibly popular program receive more federal funding and come storming back? Here is what The Freep reported on the subject:
“I think it was a well-intended program … and frankly the program at this very early stage has to be viewed as a huge success,” Czubay said. “We are going to be working with the government to say, are we accomplishing all the things we want?”
Michigan lawmakers were set to meet Friday morning to map a strategy for pushing more money to the program.
“In just four days, we have done more to stimulate the economy with ‘Cash for Clunkers’ than any government program since the downturn began last fall,” said Rep. Fred Upton, R-St. Joseph.
Several Michigan lawmakers had already vowed to press for more money for the program, which had originally been set for $4 billion. But Sen. Dianne Feinstein, D-Calif., has said she would block any additional money unless the program was changed to boost the gains in fuel economy between old and new models.
Federal officials also said today that the government would honor any deal agreed to before changes made in a federal database of mileage figures last Friday.
Basically, at this point no one really knows for sure… but stay tuned – if there are any updates I will post them on DFA.
What do you think?
Is this program in the best interest of the consumer? Should the federal government be getting involved anymore than they already are?
Here are a few useful links for more info on the Cash for Clunkers program:
- Cash For Clunkers Bill explained
- Cash For Clunker FAQ’s
- Cash For Clunkers more FAQ’s
- Cash for Clunkers Information
- Gas Guzzler Rebate, Get Cash For Clunkers
- Cash for Clunkers Program
- Clunkers For Cash: Is It Even Worth It?
- Car Allowance Rebate System To Finalize Soon
- Cash for Clunkers Tax Rules
- Cash for Clunkers Still Running
- Is The Cash for Clunkers Car Buying Stimulus Program Dead?
- My Opinion on the Cash for Clunkers (CARS) Program
Bible Money Matters says
It sure didn’t take long, did it? It went live less than a week ago, and now it’s suspended. I have no problem with that – it’s just another waste of money program in my opinion. I’m sure we’ll see legislators trying to re-activate the program over the coming months though. We shall see!
PT Money says
Good find, Matt. I’m assuming some dealers had already made the deals using the credit. Now they’ll be stuck holding an interest-free govt note till this gets worked out. I guess that’s what they get for counting on the US govt though.
Jason @ One Money Design says
Wow! Here one day and gone the next. I didn’t think much of the program. My concern was seeing people persuaded into big new car payments after trading in their clunker. Will be interesting to follow this.
Matt Jabs says
Yeah, the feds getting involved in all this has been a concern of my from the get go. I’m surprised that so many people were attracted to it actually.
Seems like it was way more popular than I gave it credit for. I think there are some good intentions in the program but I think the benefit is more for auto manufacturers than anyone else.