REPORT: Cash for Clunkers could be dead tonight [UPDATE]
by Jonny Lieberman on Jul 30th 2009 at 8:05PM 
Congress allocated close to $1 billion for the Cash for Clunkers program. That's billion with nine zeros. And all that money might be gone by midnight tonight. This, according to reports by both the Detroit Free Press and Edmunds AutoObserver. We learned earlier that the C4C program has proved to be much more successful than initially thought, with 22,782 consumers taking advantage of between $3,500 to $4,500 federal duckets for their old "clunkers" during the programs first five days. In fact, so many people are taking the feds up on the deal that dealers are worried they are going to lose track of all the trade-ins. The Department of Transportation (DOT) could announce the suspension of the program as soon as tonight. In fact, they could announce that all the money is gone and the program is over. We gotta wonder what John Maynard Keynes would make of all this.
UPDATE: As of 9:41PM EST, the Detroit Free Press is reporting that White House administration officials alerted Congress this evening that the Cash for Clunkers would be suspended, though White House officials have denied the report. Confusion is running rampant at this point, but it seems that the $950 million allocated for reimbursement of passenger car and light truck rebates is all but gone and government officials will spend Friday figuring out how to find more money for the program and untangle the reimbursement process for dealers.
[Sources: FREEP, AutoObserver | Image Source: Theo Heimann/Getty]
Reader Comments (Page 1 of 7)
Steven 8:10PM (7/30/2009)
Three days of economic stimulus...nice.
Reply
Kyle 8:14PM (7/30/2009)
works every time...
Saxxon 8:32PM (7/30/2009)
HOORAY!!! Another successful taxpayer funded, social program, brought to you from your friends at the United States Government.
Now, who's ready for nationalized health care!?!?
Jei 8:36PM (7/30/2009)
I think this story is incorrect. Just 1-2 days ago, it was reported the the CFC Program had used nearly $100M of the allotted $1B funding available. All of a sudden, the funding is in danger of drying up? In less than a week?
Jei 8:40PM (7/30/2009)
I found this article on MSNBC:
"...Through late Wednesday, 22,782 vehicles had been purchased through the program and nearly $96 million had been spent. But dealers raised concerns about large backlogs in the processing of the deals in the government system, prompting the suspension.
A survey of 2,000 dealers by the National Automobile Dealers Association found about 25,000 deals had not yet approved by NHTSA, or nearly 13 trades per store. It raised concerns that with about 23,000 dealers taking part in the program, auto dealers may already have surpassed the 250,000 vehicle sales funded by the $1 billion program.
“There’s a significant backlog of ’cash for clunkers’ deals that make us question how much funding is still available in the program,” said Bailey Wood, a spokesman for the dealers association..."
For full article, follow link (copy & paste) below:
http://www.msnbc.msn.com/id/32228179/ns/business-autos/
Frank 8:54PM (7/30/2009)
You know Saxxon , you just don't get it.
Frank 9:03PM (7/30/2009)
"You know Saxxon , you just don't get it."
Yes he does. Programs that stimulate short demand are like those energy drinks. You go great guns for about 3-5 hours then you crash. I guess if it get’s them to election day it’s worked.
some1 9:04PM (7/30/2009)
So lets get this straight, we spent non existent taxpayer money to fund this program, while at the same time spending large amounts of money in itself paying congress officials wages to bicker back and forth about this for weeks, only to can the entire process?
amazing
geo.stewart 9:05PM (7/30/2009)
Keynes was a moron.
The war is what made the economy successful and ended the depression, not his failed theories on the economy.
and beefing up government so that its a leech 1/3 the size of its host (the economy) is not sustainable either.
Tool 9:07PM (7/30/2009)
This makes no sense.
If the CARS fund is $1,000,000,000 and the payout is either $3,500 or $4,500 . . . the fund should cover approx 250,000 vehicles.
KIB2 9:15PM (7/30/2009)
At the rate the cars are saling, the program would last only about 20-22 days anyways. Take into account the pending deals, I can see why the funding is drying up so fast.
Eric Norsworthy 9:57PM (7/30/2009)
Anybody who cannot figure out the math I will help.
The fed expected 250,000 cars to be traded in.
The 2000 dealers surveyed averaged 13 cars per dealer on backlog. They projected these results onto the 23,000 dealers participating in the program. 23,000*13 = 299,000 cars on backlog.
BigWill 10:04PM (7/30/2009)
So the government spends $1 billion to fund this program, but doesn't budget $10 for an abacus to keep count of payout requests?
gerrrg 10:12PM (7/30/2009)
The actual story is, that the Gov't is considering suspending the program because of fears that it is so popular, that they will run out of funds so soon.
The concern is that as it stands, only half of the dealers that applied have been approved to participate, and if the popularity of the program is any indication, these other dealers might miss out on the entire program as the money runs out before they're approved. The other concern is that because there is a huge backlog of applications yet to be processed for turning in C4C, there may in fact be a lot less cash available out of the $1 billion.
So the story / conclusion is incorrect; the Gov't didn't run out of the $1 billion...or actually, no one knows how much cash is actually left in the program.
inteller 10:56PM (7/30/2009)
so, doesn't this mean it was a success?
Ford is going to come out on top with this....just you watch.
lne937s 11:18PM (7/30/2009)
This program costs the equivalent of about 1 1/2 days of the tax cuts put into place last April (the largest portion of the stimulus bill). 1 Billion is not a lot of money from a national perspective (~$3 per person). I have no doubt that talking about this program is stimulating magazines and other publication revenue alone more than that day and a half of tax cuts has stimulated the economy.
SimbaDogg 2:27AM (7/31/2009)
wait what...they're discontinuing the program because the 950 mill is almost up? just rounding, and doing some mental math...25,000 customers x4k average =100 million. wtf happened to the other 850 million? or am i dense...
ebleyes 3:58AM (7/31/2009)
It appears that the program was too successful to succeed.
notYou 8:01AM (7/31/2009)
@Tool: If the CARS fund is $1,000,000,000 and the payout is either $3,500 or $4,500 . . . the fund should cover approx 250,000 vehicles.
Do you think these programs run by themselves? There's bureaucrats, lawyers, paperwork, infrastructure, accounting etc. that goes along with this.
I'll bet by the end of this, 50%+ of that 1 Bazillion went to overhead. The Fed is horrible at efficiency (and why wouldn't they be? it's not like they have to operate in the black or are held accountable).
British_Rover 9:47AM (7/31/2009)
@notyou
50 million was allocated for administration cost and for setting up the computer program. It is in the bill some where go find it I remember reading it before.