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"Cash For Clunkers" Program Runs Out of Gas
Ponca City, We love you writes "The Washington Post reports that Transportation Secretary Ray LaHood has called members of Congress to inform them that the 'cash for clunkers' program will be suspended because the program has run out of money, and congressmen say they intend to ask the Obama administration to divert some funding from the existing economic stimulus package to maintain a scheme that they see as genuinely stimulative. 'Clearly, this has been a very stimulative program that's got consumers back into the car market. It's our hope that possibly more funds can be made available,' says Cody Lusk, president of the American International Automobile Dealers Association." If there is more funding, though, a report on CNET says it may come out of money to have been set aside for renewable energy loans by the US government.
Yeah, and the big issue is the dealerships/new owners may get screwed. There are a ton of cars yet the dealerships have to process via the CARS system. I guess it can take up to 3 hours per car to actually file the thing. The government ran out of money, and the dealerships still have many, many cars sold under the CARS program they are going to need to get CARS money for.
Problem is, the government is working at it's finest again. I'm not really for either party, so don't read this as me blaming one side or the other, it's just how it's been reported. The House has passed the extra $2 million, but it still has to hit the Senate. From reports, there's a few Republican Senators who are going to block the bill, or at least try to stall it long enough.
Why are they going to do this?? I don't have a clue. I understand they may not like the CARS issue, and maybe think it's a waste of money. But that raises a few points. One, it's helped save a lot of small car dealerships, at least for a time now. Two, the money that's been flowing around surely hasn't hurt the economy. Three, if the Senate shoots down the extra money, what's going to happen to the dealerships and new car owners who find out that even though their trade in + new purchase met the requirement of the program, the program ran out of money faster than anyone could believe so now the $3500 or $4500 per car is a no go? The dealership is basically stuck fronting the $3500 or $4500 until the government can get them the money as is. Without the extra influx of money to the CARS program, a *LOT* of dealerships may find themselves holding a *LOT* of $3500 or $4500 "discounts" that will take a struggling business market already and completely trash it.
Even if the dealerships went after the customer for the extra $3500 or $4500, a lot of them may not be able to afford the extra costs, or may have to sell the car off right away. While this may help the "new" used market segment, the customer is back to purchasing a cheaper, possibly less fuel efficient car to get around.
All in all, a confusing and maybe not completely thought out program, but with an even more poorly thought out Government Party "I'm not going to support it because it's another parties idea" possible blocking of money.