Update 2: Cash for Clunkers To Be Suspended

Posted by Mike Levine | July 30, 2009

Cash for Clunkers Signed By President Obama

Update #2 July-31-2009 02:00 PDT:
The U.S. House of Representatives just passed a measure to add $2 billion in funding to CARS. The Senate will vote on the bill next week.

Originally, $4 billion was allotted for the plan when it was first conceived; it was later reduced to $1 billion. It’s unknown if the program will stand as-is, with the Nov. 1 cut-off date intact, after hitting the Senate next week.

With this bill’s passing and the White House’s assurances on Cash for Clunkers, it’s likely safe to say you can go out this weekend and buy a new truck through the program.

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Update #1 July-31-2009 08:04 PDT:
As of this morning, Cash for Clunkers has yet to be suspended. According to The Wall Street Journal, the Obama administration is looking at options to get additional money for the program. The House plans to vote today on funding. Stay tuned.

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If you haven't traded in that old truck for a new one under the federal government's Car Allowance Rebate System (informally known as Cash for Clunkers), it may be too late. There's word this evening that the vehicle purchase stimulus plan will be suspended after news that the program has been burning through its $1 billion in funding much faster than anticipated.

According to USA Today, as of Thursday evening the government said it had paid out $221 million since CARS started Monday. And in a survey of 2,000 dealers by the National Automobile Dealers Association, NADA found that approximately 25,000 deals had not yet been approved by NHTSA, or about 13 trades per store. With around 23,000 dealers asking to be part of the program, auto dealers may have already arranged the sale of more than the approximately 250,000 vehicles that federal officials expected the plan to generate.

CARS had originally been expected to run until November 1.

Developing...

[Sources: Jalopnik, USA Today, NADA]

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Comments

so if i take my 'far from clunker' truck to an approved dealer, i get $4500? or is that towards a trade. on comm, they say CASH w/ no fine print saying w/ app. trade?

Posted by: jesse | Jul 31, 2009 2:23:42 AM

@Jesse: As long as your truck meets the guidelines we summarize here: http://news.pickuptrucks.com/2009/07/reminder-cash-for-clunkers-expected-to-start-july-24.html, you may be able to qualify for the rebate. The rebate discounts the price of any CARS qualified vehicle you purchase.

Posted by: Mike Levine | Jul 31, 2009 3:54:47 AM

Front page on Drudge....It is a total mess in the showrooms. Government computers are crashing. If they can't get this little program right, imagine if they take over health care. http://thelede.blogs.nytimes.com/2009/07/31/dealers-race-to-get-their-clunkers-crushed/?hp

Posted by: Scott | Aug 1, 2009 8:26:05 AM

The remaining 2 billion might surprise everyone by how fast it goes. Yesterday 7/31, dealers were telling me the traffic was so heavy, people were not being served. At midnight all week long they were actually closing doors on customers still wanting cars. Throughout this weekend could be an onslaught of deals, requiring more than the 2 billion, allocated. OOPS! As I mentioned in earlier articles, if you are casually looking for a new car, now is not the time.

Posted by: CyCarConsulting | Aug 1, 2009 3:09:52 PM

@Jesse (and Mike):

The $4500 is not a rebate, it's more like a "guaranteed trade". It is NOT in addition to your trade-in value, it TAKES THE PLACE OF your trade-in value. So if your current truck is worth more than $4500 you lose out. It is also only applicable on the purchase of a brand new vehicle. Many people (and a lot of the dealers) don't understand this and are only finding out after they sign the paperwork. That is why traffic is so high -- people are pouring into showrooms expecting to get $4500 plus their trade-in, which is not the case.

In a few years nobody will be able to afford used vehicles since there won't be as many around and the prices will go up. We will also begin to see a shortage of used parts you would normally get from a junkyard or recycler since the vehicles will be crushed instead of parted out (in order to get reimbursed the dealership must provide proof to the government that the vehicle was completely crushed).

This whole thing is going to turn into a big mess .....

Posted by: sk | Aug 4, 2009 11:27:25 AM