Till Monday night, Car shoppers have to take advantage of lucrative Cash for Clunkers rebates from the government, and the Obama admin 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 at 8 p.m.
President Obama and his officials declared the program is very success. Cash for Clunkers was boosted to $3 billion in early August after heavy customer demand nearly depleted its funds in just one week. 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 $3,500 or $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. “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 Jarratt, Va. His dealership won’t be offering the clunker deals this weekend because it has yet to be repaid for 21 sales.
The popularity of the program has also caught manufacturers by surprise, one reason they’ve run short of some vehicles that clunker traders want to buy. Some dealers have sold out of models like the Jeep Patriot and the Ford Focus, for instance. Buyers were left wondering whether they can still get a clunker deal when the next shipment arrives or should pick another vehicle. So the government has tweaked the rules to include new cars that aren’t on dealer lots but are in the production pipeline. As long as the dealer can identify an actual vehicle and its vehicle identification number, or VIN, the clunker deal can go through, even if the car is delivered after the program expires. Buyers need to make sure the VIN of the car they ultimately take home is the same as the VIN on the original sales agreement and watch out for any other kind of bait-and-switch.
Government officials said there were no plans to extend the program again. The Monday deadline was set to avoid surpassing the $3 billion funding level, given deals that may be made this weekend and those that are still in the pipeline for approval. Obama said in an interview Thursday that the program has been “successful beyond anybody’s imagination” but dealers were overwhelmed by the response of consumers. He pledged that dealers “will get their money.” The administration has said it has tripled the number of staffers sorting through the paperwork.
“It’s been a good day for a few weeks. Its going to be fun everywhere.