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Cash For Clunkers Suspended

This article was written by in Consumer. 6 comments.


Editor’s Note: This program is back on again and should be available through Labor Day, 2009

All good things must come to an end, and in some cases, prematurely. The “Cash for Clunkers” Program, or more formally, the Car Allowance Rebate System, has allocated almost all of its budget to rebates after only four days. The law called for the program to last until November 1 or until the funds are depleted, which ever condition occurs sooner, but I do not think there were many people who expected the funds to run out this quickly.

Consider yourself lucky if you were able to qualify for the program before it was suspended.

Car dealerships apparently saw active business this past weekend, and if all the funds were used up then the program was somewhat successful. While on the surface, Cash for Clunkers appeared to be a program designed to help consumers or to help the environment, but the real goal was to help dealers sell cars. It resulted in some short-term success despite setbacks due to the EPA’s recalculation of mpg, but we will have to wait for the car companies to report their finances to judge the success.

It’s also a possibility that Cash for Clunkers will come back. If the Congress decides the program is worth spending more money, we could see another Cash for Clunkers. And if we do, it might even improved to apply to more cars.

Update: While the Transportation Department called dealerships to tell them to stop accepting applications for Cash for Clunkers, the White House informed the public overnight that the program would continue. The House and Senate are now racing to re-authorize the program for another $2 billion.

Updated August 7, 2009 and originally published July 30, 2009. If you enjoyed this article, subscribe to the RSS feed or receive daily emails. Follow @ConsumerismComm on Twitter and visit our Facebook page for more updates.

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About the author

Luke Landes, also known as Flexo, is the founder of Consumerism Commentary. He has been blogging and writing for the internet since 1995 and has been building online communities since 1991. Find out more about him and follow Luke Landes on Twitter. View all articles by .

{ 6 comments… read them below or add one }

avatar KC

You still gotta wonder who is buying these cars. I was just watching a local news report and saw my neighbors on it at the car dealership. I looked in their driveway and their old van is gone – guess they are getting a new one. Funny thing is…they aren’t poor. In fact they are quite well-off. The van they are trading in is the one they all pile in to go to football and basketball games at the local, private D-1 school in my city. This van is their third car, not the main car and is not on the road much at all. Although the old van probably gets 5 mpg it isn’t on the road more than 1X a week. I don’t blame them at all for taking advantage of this program, but I don’t think that was the intent. So how much is this program really helping?

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avatar nickel

KC: The real intent was to get people to buy cars, so it had the desired effect in the case you’re talking about.

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avatar Twiggers

Watching NBC News last night. They said that the White House said that it will not suspend program yet, but that they will be meeting today to determine what the next step is.

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avatar Tom Dziubek

@KC & @Nickel: Not only to buy cars, but to get the gas guzzlers off the road. If the well-off family traded in a “clunker” to get a new car with better fuel efficiency, then they definitely had every right to do so. Even if it was used only once a week, they might eventually sell it to someone…or give it to one of the kids just learning to drive…who will use it as their regular car. Under the C for C program, that van will now be destroyed.

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avatar Craig

It’s a victim of its own success. Congress is trying to add 2B to refund it and keep it going but not sure if that will be good idea or not.

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avatar Andy

Looks like the program is back on again with the house approving the $2Bb. Given the success I am sure it will be approved and is actulaly one of the stimulus type payments that is actually working.

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