‘Cash for Clunkers’ Good Through the Weekend


By Ken Thomas, Associated Press Writer

WASHINGTON (AP) — At the White House, press secretary Robert Gibbs sought to assure consumers that the Cash for clunkers program is still running and will be alive "this weekend."

"If you were planning on going to buy a car this weekend, using this program, this program continues to run," Gibbs told reporters as lawmakers hurried to find another $2 billion to allocate to the popular porgram. He would not commit to any timeframe beyond that.

The White House said Thursday it was assessing its options amid concerns the $1 billion budget for rebates for new car sales may have been depleted. The program officially began last week and has been heavily publicized by automakers and dealers.

Dubbed the Car Allowance Rebate System, or CARS, the program offers owners of old cars and trucks $3,500 or $4,500 toward a new, more fuel-efficient vehicle, in exchange for scrapping their old vehicle. Congress last month approved the plan to boost auto sales and remove some inefficient cars and trucks from the roads.

The program was scheduled to last through Nov. 1 or until the money ran out, but few predicted it would be depleted in days. Through late Wednesday, 22,782 vehicles had been purchased through CARS and nearly $96 million had been spent.

But dealers raised concerns about large backlogs in the processing of the deals in the government system. A survey of 2,000 dealers by the National Automobile Dealers Association found about 25,000 deals had not yet been approved by the government, or nearly 13 trades per store.

It suggested that with about 23,000 dealers taking part in the program, car 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.

The reports that the CARS program could be suspended created confusion among many dealers, who had showrooms filled with car shoppers looking to scrap their gas guzzlers.

Alan Helfman, general manager of River Oaks Chrysler Jeep in Houston, said he was worried that the government wouldn't pay for some of his clunker deals. His dealership has completed paperwork on about 20 sales under the program, but in some cases the titles haven't been obtained yet or the vehicles aren't on his lot.

"There's no doubt I'm going to get hammered on a deal or two," Helfman said.

The clunkers program was set up to boost U.S. auto sales and help struggling automakers through the worst sales slump in more than a quarter-century. Sales for the first half of the year were down 35% from the same period in 2008, and analysts are predicting only a modest recovery during the second half of the year.

So far this year, sales are running under an annual rate of 10 million light vehicles, but as recently as 2007, automakers sold more than 16 million cars and light trucks in the United States.

Lawmakers said they would try to find additional funding for the program, which under the legislation could grow to $4 billion for the funding of up to 1 million new car sales.

"I can think of no better use for unspent stimulus dollars that are gathering dust than financing 'Cash for Clunkers,'" said Rep. Fred Upton, R-Mich.

Brendan Daly, a spokesman for House Speaker Nancy Pelosi, D-Calif., said they would work with "the congressional sponsors and the administration to quickly review the results of the initiative."

General Motors Co. spokesman Greg Martin said the automaker hoped "there's a will and way to keep the CARS program going a little bit longer."


AP Auto Writer Tom Krisher in Detroit contributed to this report.

Copyright 2009 The Associated Press.  All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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