Cash For Clunkers Program Closes

By: Andy Hodges
Staff Writer
Published: Aug 22, 2009

Good Sales Brought Successful Cash For Clunkers Results

The Cash For Clunkers program is one of the best government auto incentives to help revive the sinking auto industry. U.S. Transportation Secretary Ray LaHood announced Thursday that car voucher program will officially end on Monday, August 24th at 8 p.m. EST. It was originally scheduled to run through November, but the program ran out of funds for a second-time. The program is known as the Car Allowance Rebate System (CARs).

"This program has been a lifeline to the automobile industry, jump starting a major sector of the economy and putting people back to work," U.S. Transportation Secretary Ray LaHood said in a statement. "At the same time, we've been able to take old, polluting cars off the road and help consumers purchase fuel efficient vehicles."

This program offered several benefits including consumer savings, offering up to $4,500 for their clunker trade-in, and improving air quality. The idea was to remove as many low-mileage conventional vehicles off the road as possible, while putting consumers into new fuel efficient cars. The less cars that are on the road today will reduce overall carbon emissions and will help the environment. Better yet, consumers will save on the price of gas before it begins to rise again.

However, a program of this magnitude also came with headaches. Dealers complained that the government was taking too long for reimbursement, but the consumers found it the right time to buy a new hybrid car. According to the Department of Transportation, the CARs program has recorded 489,269 sales under the government's $3 billion rebate program. The total value of the rebates claimed by dealers stood at $2 billion.

Automakers benefited from the program as both General Motors and Ford Motor Company are ramping up production and rehiring workers who were laid off earlier in the year. While $3 billion is a lot of money, it's far from the trillions of dollars that the government wants to spend on other economic stimulus programs. Some people argue that the program ended too soon. Toyota, Honda, and Ford sold the most vehicles.

"I had another month to go before I was ready to save enough money for a new hybrid car," Lewis Dalton, a local Orlando resident, who thought the program ended too soon and did not provide enough notice to consumers. "They should keep it going, it's good for business and job growth."

Most consumers traded-in clunker trucks and sport utility vehicles for new hybrid passenger cars. Others bought hybrid SUVs that can provide anywhere from 28 to 32 mpg. Hybrid cars can save about 60 percent gasoline in comparison to their conventional counterparts.

The voucher rebate incentive had its critics and show-stoppers. However, it is one of the most successful government programs to date, even with a few bumps in the road that once halted it for two days after depleting funds. Whether or not the government is willing to continue Cash For Clunkers is something yet to be seen, but officials are declaring that it has run its course.