How's this for stimulus? The U.S. government may be close to suspending the insanely popular, $1-billion "Cash for Clunkers" program because it has already run out of money after only a few days of existence, various news outlets are reporting. The program was intended to run through Nov. 1.
"Obviously the program has been an immense success in stimulating automotive sales," Bailey Wood, legislative director of the National Automobile Dealers Association, has told USA Today.
Under the program, a buyer trading in a car or truck could receive up to a $4,500 allowance for a new vehicle as long as both vehicles met certain age, fuel-efficiency and other restrictions.
The stimulus program offers incentives to consumers to trade in older cars and trucks for more fuel-efficient ones. But work truck owners also could take advantage of a special provision in the rule for heavy-duty pickups, which do not receive fuel efficiency ratings.
Under the provision, a “Category 3” truck, defined as having a gross-vehicle weight rating of 8,500 to 10,000 lb, could be traded in for one of the same size or smaller (DOT Class 2) for a $3,500 rebate, with no mile-per-gallon restrictions as long as the “clunker” was not made in 2002 or later.
Update: With dealers still airing scores of C4C television commercials, the program came to a screeching halt late July 30 pending further review of backlogged transactions and a possible extension. "This is simply the most stimulative $1 billion the federal government has spent during the entire economic downturn," Rep. Candice Miller (R-Mich.) told the Associated Press. "The federal government must come up with more money, immediately, to keep this program going.
The Obama Administration has since advised dealers to continue selling under C4Cs, with the House passing a $2-billion extension of the program. The Senate is expected to take it up on Monday, August 3. Dealers say they may be at risk of losing funds, but as for now, there is still time to trade in.
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