Cash For Clunkers Program Suspended
Too many clunkers, too little cash
Less than a week after launching, the $1 billion Cash for Clunkers program may be almost spent out.
By Jennifer Liberto and Peter Valdes-Dapena, CNNMoney.com senior writers
Last Updated: July 31, 2009: 12:03 AM ET
NEW YORK (CNNMoney.com) -- This much seems certain about the Cash for Clunkers program: Consumers are happy to take government rebates to buy new cars.
The fate of the $1 billion trade-in program was up in the air late Thursday over concerns that it may have already burned through its funds less than a week after it was launched.
Congressional sources said earlier in the day that the program would be suspended.
A White House official and a source at the Department of Transportation later said the program would not be suspended. The DOT official said the administration would try to work with Congress to find more funds to keep it going.
Indeed, one of the program's main champions in Congress, Sen. Debbie Stabenow, D-Mich., called on the administration and Congress to appropriate more money for it.
Stabenow said Clunkers has provided an important boost to the economy and resulted in 200,000 car sales.
"I am delighted to hear dealers say that all of their salespeople are busy and they are selling more cars in a day than they had been selling in a month," Stabenow said.
Meanwhile, the transportation department, which runs the program, was sorting out how much of the plan's funds have already been committed.
Cash for Clunkers, which Congress passed in June, is set to end on Nov. 1 or whenever its $1 billion budget has been depleted.
An early version of the Cash for Clunkers legislation in Congress called for appropriating $4 billion.
Under the plan as enacted, vehicles purchased after July 1 will be eligible for refund vouchers worth $3,500 to $4,500 on traded-in gas guzzlers. The trade-in vehicle has to get combined city and highway fuel economy ratings of 18 miles per gallon or less.
The program aims at helping the struggling auto industry by taking inefficient cars off the road and spurring new sales.
"With this program, we are giving the auto industry a shot in the arm and struggling consumers can get rid of their gas-guzzlers and buy a more reliable, fuel-efficient vehicle," Transportation Secretary Ray LaHood said in a statement Monday.
Domestic auto sales have been hit hard by the recession and credit crunch and helped propel the bankruptcies and government bailouts of General Motors and Chrysler. In June, the seasonally adjusted annual sales rate fell to 9.7 million, a pace well below recent years.
As of Wednesday afternoon, nearly 30,000 Clunker transactions had already been submitted to the National Highway Traffic Safety Administration, the agency said, with requests totaling almost $96 million in disbursements.
--CNN's Jamie Crawford and Kevin Bohn contributed to this report.
2003 Jeep Grand Cherokee my current DD
1995 3.5L Intrepid, Sold in 2010