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Cash-for-Clunkers runs out of cash
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By CHUCK CLEMENT, Staff Reporter
| 07/31/2009 |
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So much for government programs that don't work. Washington's Cash-for-Clunkers car discount offer has drawn so many interested participants that the federal program has run out of money three months ahead of schedule. The business people who make and sell automobiles in the United States are hoping that Congress puts more money as quickly as possible into the Car Allowance Rebate System, the official name for the program. Pat Prostrollo, president of Madison's Prostrollo Auto Mall, has no doubts that the rebate program has performed in the manner that its backers had hoped.
"Since the program started, it's been fast and furious here," Prostrollo said. "It's certainly done the job that the program was designed to do."
According to Prostrollo, the Madison car dealership has conducted 20 to 25 sales since the program began on Sunday. The federally-funded CARS program had an original budget of $1 billion that was supposed to last until Nov. 1 or until the money ran out. On Thursday, U.S. Transportation Secretary Ray LaHood started telling members of Congress that the Cash-for-Clunkers program was tapped out and the rebate program would come to a halt at midnight, according to The Associated Press.
Later on Thursday, Obama administration officials started assuring the program's backers that CARS would not be suspended and the government would honor all valid auto deals.
The Associated Press reported Friday (today) that U.S. House members were trying to pass a bill that would add another $2 billion to the program.
Despite its popularity -- or probably because of it -- the Cash-for-Clunkers program hasn't operated without a glitch. According to Prostrollo, the government Web site that's supposed to process the paperwork for the rebate deals has continually crashed since the program started. Prostrollo said the application process at www.cars.gov was supposed to take from 45 to 60 minutes to complete per auto purchase. However, he reported that the Web site would crash about 30 minutes after car dealers started submitting information.
Sen. Debbie Stabenow, D-Mich., announced on Thursday that more than 200,000 recent automobile sales were connected to the CARS program. The majority of those sales still need to move through the application process.
In the CARS program, car buyers will qualify for a $3,500 rebate if their new car possesses a 4 to 9 mile-per-gallon improvement compared to their trade-in's gas mileage. Buyers receive a $4,500 rebate if the improvement is 10 mpg or better. Car buyers have to meet certain requirements related to vehicle age, mileage, auto insurance and other criteria to qualify for the program.
Prostrollo said he hoped that the rebate program would continue.
"We'd certainly like to see it carry on," he said. "We'd hate to disappoint the customers who want to use the program."
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