Cash for Clunkers Ends Monday

The highly successful “Cash for Clunkers” program will end Monday, according to Transportation Secretary Ray LaHood. Part of the overall stimulus package, this program offered up to $4500 in rebates to car buyers who traded in certain older vehicles with poor fuel economy. “Cash for Clunkers” was designed to have a twofold effect, both reducing harmful emissions and giving the cash-strapped automobile industry a much needed boost in sales. Consumer reaction to the program was far more enthusiastic than predicted, necessitating additional funds to cover the cost of the consumer rebates. Despite continuing consumer demand, Lahood announced that applications for rebates will no longer be accepted after Monday, August 21, 2009.

Lahood indicated that the Cash for Clunkers program had already processed over $1.9 billion dollars in rebates, with over 450,000 dealer transactions already recorded by the Federal government. “This program has been a lifeline to the automobile industry, jump starting a major sector of the economy and putting people back to work,” Lahood said. Auto manufacturers saw the greatest increase in sales in their fuel-efficient passenger vehicles, with the White Hosue estimating an increase in gas mileage of approximately sixty-one percent over the trade-in vehicles.

The Cash for Clunkers program, also known as CARS, was originally only funded for $1 billion, but after the unexpected consumer response to the program, $2 billion in additional funds was passed by Congress. It is expected that these funds will be essentially depleted by the end of the program. Auto manufacturers and consumers alike have seen the benefits of this program, with Ford Motor Company announcing plans to step up production in response to extremely brisk sales of fuel-efficient cars in the first two weeks of August.

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