The government is reportedly slamming the brakes on the seemingly popular Cash for Clunkers program.
Why is Cash for Clunkers Put on Hold?
The program is so popular that the government isn’t sure if they’ve already blown through the $1 billion allocated to provide rebates to dealerships that accept clunkers. That means around 200,000 car sales occurred in a very short period of time.
One could say this is good for the economy I suppose, but the long term effect of selling a bunch of cars in the last few days remains unseen.
Will Cash for Clunkers Come Back?
There are a few ways the program may be brought back:
Haven’t used all of the funding for Cash for Clunkers
Once the National Highway Traffic Safety Administration calculates how much of the funding for the program has been used up we will know where we stand. If less than $1 billion has been used I would imagine the program would come back until all of it is used.
Congress gives more money to the Cash for Clunkers program
One of the original versions of the bill that went through Congress had the funding for rebates on clunker cars set to $4 billion. With the spend-whatever-you-want ways of this Congress and administration I think it would be likely the program would receive more funding. They’ll point to things like “See, this is good for the American economy. It’s good for the dealerships and the manufacturers. This is a popular program. We should keep it up.”
Will My Dealership Back Out of My Purchase?
There are a lot of worried potential car buyers today. The dealership is relying on the $3,500 to $4,500 rebate the government provides under the Cash for Clunkers program. If they submit information to get the rebate and are told “Sorry, we’re all out of money” they may ask you to bring the new car back or to pay the difference.
After the news broke last night that the program was out of money the administration was quick to jump in and say that the program still had money and they were just evaluating how much money was left. Obviously since we are talking hundreds of thousands of transactions the reported news may be completely inaccurate.
Will your dealership back out of the deal? Not necessarily, but they have to protect themselves and be cautious as well. I believe this could have been resolved if the government had set up some sort of dealership-only website where they could submit a need for a rebate and get an instant result (“Yes, rebate can be processed” or “No, sorry we are out of money).
Then again I wasn’t exactly counting on the government to run this type of program well either.
Has anyone out there successfully used Cash for Clunkers?
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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
Cash for clunkers should come back!
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