Just in Time: Government Increases Clunkers’ Budget
President Obama extended the Car Allowance Rebate System (CARS) on Friday with $2 billion in additional funds, and on the same day the initial $1 billion investment was officially used up by U.S. car dealers.
Autoblog reports that on Friday, the total claimed was at $1.03 billion, with an average claim of $4,197 per vehicle. This included a 33 percent jump in claims from August 5-7, during which time the Senate had approved additional funding but Obama had yet to sign off. Without the increase in funds, dealers would have been financially responsible for the discounts provided to car buyers, as well as the costs of disposing of any cars accepted.
As of Aug. 7, dealers submitted 245,384 Clunker claims. Photo: ThreadedThoughts on Flickr.com
The original Cash for Clunkers program was supposed to run through November 1, with a stipulation for when funding expired. Another change since the program first started is that the EPA updated fuel economies, meaning 78 cars that originally qualified are no longer accepted, and an additional 86 have been added to the list.
As a recap, qualifying cars are less than 25 years old and get less than 18 mpg, with looser restrictions for trucks. Cars must have valid registration and insurance and be traded in toward the purchase of a new, fuel-efficient model. Cars accepted by the dealer will have the engine disabled and then be sent to auto scrappers for recycling.
Upon signing the extension, Obama remarked, “The [CARS] initial transactions are generating a more than 50 percent increase in fuel economy; they are generating $700 to $1,000 in annual savings for consumers in reduced gas costs alone; and they are getting the oldest, dirtiest and most air polluting trucks and SUVs off the road for good. Businesses across the country — from small auto dealerships and suppliers to large auto manufacturers — are putting people back to work as a result of this program.”
