The Cash for Clunkers Program is Running Out of Money, but is Still Up and Running...
Cash for clunkers suspended? According to the White House, the Cash for Clunkers program is not suspended. I was in the news stand at concourse C in the PHX airport, on my way to Salt Lake City when i looked up and saw President Obama talking about Cash For Clunkers... I was transfixed while standing in front of the computer magazines (great article on Digital Gentlemen in Wired), and then I saw him say it with my own two eyes "we will continue funding" the cash for clunkers program... Hooya! Party on car guys and gals, let's get back to the business of selling as many cars this weekend as possible!
The Cash for Clunkers program was designed to last through November of 2009, but has been so popular that the funding for the program is running out. The Cash for Clunkers program was given a start-up of $1 billion and is almost at the end of that rope, needing more money to continue running very soon. So, is Cash for Clunkers suspended? Not quite, but the possibility exists that this could happen if legislation is not able to approve more money to the program in the long term.
Heavy demand for the Cash for Clunkers program means that this has been a really successful endeavor by legislators. It was one of those programs where nobody was sure if consumers would take advantage of the policy, and where it wasn't a sure bet that people were going to want to buy a new car. With a great rebate right off the top (either $3,500 or $4,500) and many dealerships offering additional incentives to use their stores, consumers are coming out in droves to take advantage of the Cash for Clunkers program. The anticipation just wasn't there that money could run out, and quickly dealerships and consumers have worked through the $1 billion that had been set aside originally to run this program.
The Cash for Clunkers program was a way to do several things at once, and while helping out the struggling auto industry, it was a way to take vehicles with low miles per gallon ratings off the road and replace them with brand new fuel efficient vehicles. It worked out better than expected, probably in part because gas prices have become so bad, but also because getting a new car at a big discount seems like a great deal. Many consumers are trading in vehicles that wouldn't fetch the $3,500 or $4,500 as a trade-in or approach that number in a private sale, and look at this as a way to come out ahead in the end. With so many consumers sharing the same opinion, the government now needs to find more money for the program.