Cash for Clunkers is being scrapped come Monday -- a move the Obama administration is hoping will cap spending on the wildly popular program and ensure participating dealers get paid.
The program, which offers rebates to car shoppers of $3,500 or $4,500 for trading in their gas guzzlers for new fuel sipping vehicles, will officially end at 8 p.m. EDT on Monday. So far, the incentive has generated more than 457,000 in vehicle sales, officials said.
"It's been a thrill to be part of the best economic news story in America," Transportation Department Secretary Ray LaHood said in a statement. "Now we are working toward an orderly wind-down of this very popular program."
So far, auto dealers have made $1.9 billion worth of car sales and are expected to use up the program's $3 billion by early September. But some are looking to its end with relief.
The problem: While everyone's expecting Uncle Sam to be good for the money, the government's slow payment schedules and cumbersome paperwork have burdened dealers.
"I'm a little surprised," says Bob Mann of Stevens Creek Chrysler/Jeep/Dodge in San Jose, Calif. "The car business was at a low [point], and cash flow is important."
Under the Cash for Clunkers program, dealers had to sell cars at a discounted price and then wait for reimbursement, leaving them out of pocket in the meantime.
Politics
And dealers are disputing who should be on the hook for failed transactions. Right now, they're out the money if the government fails to approve a sale.
"Now it's come to the point where not only does the government give us money, they're taking money away and processing it," says Mann. "We know eventually the government is going to give it to us."
Government officials say they've hired more people to process claims.
Obama said in an interview Thursday the program has been "successful beyond anybody's imagination" but dealers have been swamped by the demand from costumers. He promised that dealers "will get their money." Eventually.
