Cash-for-Clunkers Funding to End Monday Night, Transportation Department Says
By Scott Doggett August 20, 2009
The Obama administration plans to cut off dealer funding for the cash-for-clunkers program on Monday night after finding that the $3 billion fund is nearing depletion, Transportation Secretary Ray LaHood said.
CARS' original timeframe had the program ending November 1.
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"This program has been a lifeline to the automobile industry," LaHood said in a statement today.
The Transportation Department said today that dealers had applied for $1.9 billion in rebates for voucher payments made to customers.
Government surveys have also sought to determine how large a stockpile of transactions remain unclaimed by dealers.
In a related development, President Obama said today that there have not been "extraordinary delays" in the processing of dealers' cash-for-clunkers claims and that the government has to be scrupulous in reviewing them to avoid fraud.
"This is actually a high-class problem to have -- that we're selling too many cars too quickly, and there's some backlog in the application process," Obama said in a radio interview released by the White House.
Many dealers have complained that they're not getting paid on claims filed as far back as July 27, when the program formally began.
Some have said they're owed government rebates that stretch into the millions of dollars for payments to customers, and that the delays are causing cash-flow problems.
Meanwhile, General Motors Co. announced that will help cash-strapped dealers waiting for clunker rebates by advancing them a 30-day interest-free loan in the amount of rebates that are being processed.
GM said it is providing the money so dealerships will have the liquidity to run their businesses and continue to deliver vehicles to GM customers.
"Our sales performance in the past two months has exceeded our internal forecast by over 60,000 vehicles, largely driven by the CARS stimulus program," Mark LaNeve, GM vice president of U.S. sales, said in a statement.
"We want to do all we can to provide customers with timely new-vehicle deliveries and dealers the liquidity they need to run their businesses," he added.
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