The government’s popular “cash for clunkers” program may be running out of money after only a matter of days as car shoppers flock to dealerships to take advantage of the rebates.
The White House said Thursday it was assessing its options amid concerns the $1 billion budget for rebates for new car sales may have been depleted. The program officially began last week and has been heavily publicized by automakers and dealers.
Transportation Department officials called lawmakers earlier Thursday to alert them of plans to suspend the program as early as today. But a White House official said later the program had not been suspended and they were reviewing their options to keep the program funded.
White House press secretary Robert Gibbs said they were working to “assess the situation facing what is obviously an incredibly popular program. Auto dealers and consumers should have confidence that all valid CARS transactions that have taken place to date will be honored.”
Dubbed the Car Allowance Rebate System, or CARS, the program offers owners of old cars and trucks $3,500 or $4,500 toward a new, more fuel-efficient vehicle, in exchange for scrapping their old vehicle. Congress last month approved the plan to boost auto sales and remove some inefficient cars and trucks from the roads.
The program was scheduled to last through Nov. 1 or until the money ran out, but few predicted it would be depleted in days. Through late Wednesday, 22,782 vehicles had been purchased through CARS and nearly $96 million had been spent.
But dealers raised concerns about large backlogs in the processing of the deals in the government system. A survey of 2,000 dealers by the National Automobile Dealers Association found about 25,000 deals had not yet been approved by the government, or nearly 13 trades per store.
It suggested that with about 23,000 dealers taking part in the program, car dealers may already have surpassed the 250,000 vehicle sales funded by the $1 billion program.
“There’s a significant backlog of ‘cash for clunkers’ deals that make us question how much funding is still available in the program,” said Bailey Wood, a spokesman for the dealers association.
The reports that the CARS program could be suspended created confusion among many dealers, who had showrooms filled with car shoppers looking to scrap their gas guzzlers.