Cash for Clunkers Limbo: What Next?
July 31, 2009
As of Friday morning, the U.S. government still had not publicly announced the suspension
of the Cash for Clunkers program due to it running out of its $1-billion allocation, but lobbying already has begun for additional funding.
The White House reportedly is working with Congress behind the scenes to try to extend funding for the Car Allowance Rebate System (CARS) at the same time that lawmakers are preparing to recess for the month of August, Reuters
reported.
In the meantime, dealers are in limbo. They will be left holding the bag if the program runs out of money and they aren't reimbursed for clunker trades. Some have chosen to suspend Cash for Clunker trades.
Ad agencies are scurrying to pull back clunker ads. And automakers, many of which are running low on the popular vehicles bought through the program, are pondering how to plan factory production schedules.
On Thursday night, the administration told Congressmen, automakers and dealer groups that CARS was running out of money after only four days in operations. The program would end or be suspended temporarily as more money was found, they were told.
U.S. Senators Dianne Feinstein, D-California, and Susan Collins, R-Maine, announced they favored an extension for Cash for Clunkers, but with greater fuel-efficiency and higher emissions reductions required than the current program.
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