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Cash for Clunkers Deadline at 8 p.m. Today

The government's Cash for Clunkers program expires at 8 p.m., as the program runs out of its original and supplemental funding.

As of 7 a.m. today, participating dealers have submitted 635,186 transactions to the government for their $4,500 reimbursement for each clunker turned in. The total outlay to come is about $2.9 billion, so that's near the total sum allotted.

CNBC autos reporter Phil LeBeau reported this morning that he's received e-mails from a number of buyers who say they are stuck in "clunker purgatory," meaning they have turned in their clunker and paid for a new car but their dealer has not yet handed over their new car. Why? Because the dealer hasn't gotten its $4,500 government check yet.

This has been extensively reported by The Post's Dana Hedgpeth, and you can read about that by clicking here.

The clunkers program is the only stimulus program so far that has "worked," and we put "worked" in quotes for a number of reasons:

-- It's been the most visible of stimulus programs and it has national reach, unlike parochial paving projects paid for by the stimulus.

-- It's been popular, meaning people have taken advantage of it, and popular, meaning it has a goal lauded by many: getting older, less-fuel-efficient cars off the road and replacing them with more fuel-efficient ones. (Though the program is *not* popular with the antique car crowd or the spare-parts lobby.)

-- It has "worked" by goosing the automakers and auto dealers with a short-term, Red Bull jolt of caffeinated money. But all that has done is burn down inventory. It was not responsible for any new cars made or any new car parts manufactured. (GM saying it's increasing capacity later this year is more a function of its post-bankruptcy turnaround.) So the program has had few upstream economic benefits. And it's unclear whether the program has actually robbed demand from the future, which means GM and Chrysler -- still on wobbly legs -- could face a serious sales decline next year.

That being said, if you're still thinking about taking advantage of the program, you've got about six hours left.

-- Frank Ahrens

By Frank Ahrens  |  August 24, 2009; 1:53 PM ET
Categories:  The Ticker  | Tags: Chrysler, GM, cash for clunkers  
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Comments

What amused me was the fact that Oklahoma Senator Tom Coburn, so opposed to an activist federal government that I wonder how he can bear to serve in it, denounced the Clunkers program vigorously on the floor of the Senate then said, in a very mild tone of voice, "But I have to admit, the car dealers in my state are all for it." Car dealers, of course, tend to be Republican in outlook, so I am sure there is a great deal of cognitive dissonance in the Sooner state on this program.

Posted by: jhpurdy | August 24, 2009 3:05 PM | Report abuse

If consumers have or can borrow so much money that they try to buy more goods than can be produced by plants running at capacity, this spending only bids up prices and makes the same amount of goods cost more.

If merchants and others try to increase their stocks so as to profit by the rise in prices, they bid up prices further.

Cash for Clunkers will take 7 plus years to repay, but the goal is to keep prices higher than market demand allows. People wouldn't buy, so if they give money away the cars can sell at what the market wouldn't bear and the government takes a huge loss. Wasn't it bad enough that the automakers were taking huge losses? It's a false economy, being run with false thinking. The losses are true. Love is profit and has plenty of demand.

Posted by: Dermitt | August 24, 2009 3:57 PM | Report abuse

I am a single dad. I am really struggling to get the boys throught college. The older one is in the Marine Corps reserves and gets some help. I've gone two winters in the mountains of NC with no heat in my 1995 Mercury. Only one window will roll down and it took two hand and some skill to close the door. I was gonna drive it till the wheels fell of and it was almost to that point.

I now have a 2009 KIA with a $175.00 per month payment. The dealer seemed pretty happy too. This car has changed my life.

PS: I'm working two jobs and am debt free but the down payment was a barrier to a new car.

Posted by: willandjansdad1 | August 24, 2009 4:21 PM | Report abuse

The program requires the scrapping of your eligible trade-in vehicle, and that the dealer disclose to you an estimate of the scrap value of your trade-in. The scrap value, however minimal, will be in addition to the rebate, and not in place of the rebate.

Jimhenry
Blogger
www.cashforclunkersfacts.info
http://www.cashforclunkersfacts.info

Posted by: jimhenry2508 | August 25, 2009 12:31 AM | Report abuse

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