Still time for Cash for Clunkers rebates
By Ken Thomas |
August 22, 2009, Saturday
|
Print Edition
Print Edition
UNITED States car shoppers have until Monday night to take advantage of lucrative Cash for Clunkers rebates from the government, and the Obama administration is hoping for a smooth ending to a program that has spurred auto sales but created headaches for many auto dealers.
The popular program will end on Monday night after burning through much of its US$3 billion in funding in just a month. All new deals will have to be completed and dealers must file their paperwork by the deadline in order to be repaid for the big incentives.
President Barack Obama and administration officials declared the program a success on Thursday, saying it has revitalized the ailing auto industry and finally brought reluctant car buyers back to dealership lots. Originally a US$1 billion program, Cash for Clunkers was boosted to US$3 billion in early August after heavy customer demand nearly depleted its funds in just one week.
Transportation Secretary Ray LaHood said the program has been "a lifeline to the automobile industry, jump starting a major sector of the economy and putting people back to work." He said the department was "working toward an orderly wind down of this very popular program."
But it has also created problems for dealers, many of whom have yet to be repaid for the clunker deals they have made. Under the program, dealers take rebates of US$3,500 or US$4,500 off the price of a new car in return for older, less fuel-efficient trade-ins that are sent to the scrap heap. They then must submit a 13-page application with proper documentation of the sale in order to get repaid.
That has left many dealers with unpaid claims worth hundreds of thousands of dollars.
"It has brought in some traffic that we would not have had, but if you don't get paid, it is all for naught," said Alton Owen Jr, sales manager at Owen Ford in Virginia.
The popular program will end on Monday night after burning through much of its US$3 billion in funding in just a month. All new deals will have to be completed and dealers must file their paperwork by the deadline in order to be repaid for the big incentives.
President Barack Obama and administration officials declared the program a success on Thursday, saying it has revitalized the ailing auto industry and finally brought reluctant car buyers back to dealership lots. Originally a US$1 billion program, Cash for Clunkers was boosted to US$3 billion in early August after heavy customer demand nearly depleted its funds in just one week.
Transportation Secretary Ray LaHood said the program has been "a lifeline to the automobile industry, jump starting a major sector of the economy and putting people back to work." He said the department was "working toward an orderly wind down of this very popular program."
But it has also created problems for dealers, many of whom have yet to be repaid for the clunker deals they have made. Under the program, dealers take rebates of US$3,500 or US$4,500 off the price of a new car in return for older, less fuel-efficient trade-ins that are sent to the scrap heap. They then must submit a 13-page application with proper documentation of the sale in order to get repaid.
That has left many dealers with unpaid claims worth hundreds of thousands of dollars.
"It has brought in some traffic that we would not have had, but if you don't get paid, it is all for naught," said Alton Owen Jr, sales manager at Owen Ford in Virginia.
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