Government Shuts Down Cash for Clunkers Program Early
USA Todayreports that the government is shuttering the Cash for Clunkers program early despite plenty of demand. The original ending date was supposed to be November 1st. Red tape and complex rules have hampered the program. There were also growing concerns the program would run out of money.
Cash for clunkers is the best-known name for the big government program that began this week to offer $3,500 or $4,500 incentives to owners of old gas guzzling vehicles who trade them in on more fuel-efficient ones. It is intended to spur moribund auto sales, helping both dealers and manufacturers.
But rules governing the program totaled 135 pages. They required dealers to register and many started off the week just trying to get answers on a government-jammed website. The rules are "very confusing," says Pete Greiner, who has a Ford dealership that bears his name in Casper, Wyo. "The administration of the program is extremely tough."
USA Today says some dealers were worried the program was about to run of money.
But some dealers say demand has been so brisk, they fear the program could go broke in days or weeks, long before its Nov. 1 expiration.
One Honda and General Motors dealer in Fort Worth says he has 50 clunker deals that are being held up by paperwork. "We're going back to our second and third round with customers to have things signed," says Will Churchill, owner of Frank Kent Motor. "They keep coming up with new forms to sign," Churchill says.
Now the dealership is in a Catch-22 situation: he must destroy the engines of clunker trade-ins to be eligible for the program. But if the paperwork falls through, he could be stuck with junked, rather than still running, cars.
As a result, Churchill says he is thinking of holding up more clunker deals.
Sadly, there was interest here and it was generating sales for deals. Hopefully, Congress will come up with a well-funded new plan with clearer rules and less red tape.
