‘Clunkers’ Auto Rebate Plan So Popular That It’s Broke

WASHINGTON — New-car shoppers appear to have already snapped up all the $1 billion that Congress appropriated for the “cash for clunkers” program, leading the Transportation Department to tell auto dealers Thursday night to stop offering the rebates.But a White House official said the program had not been suspended, creating confusion about its status. The program offers $3,500 to $4,500 for people who trade in an old car for a new one with higher fuel economy. In a statement issued Thursday evening, Robert Gibbs, the White House press secretary, said: “We are working tonight 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.” The program, formally known as the Car Allowance Rebate System, was scheduled to be offered until Nov. 1, or as long as the money was available. But the program was so successful that it has exhausted all the money allocated within the first week. Dealers have submitted applications on behalf of consumers seeking rebates on about a quarter-million vehicles. The National Automobile Dealers Association surveyed its members in recent days and warned the Transportation Department on Thursday that it had a very large backlog of applications, said Bailey Wood, a spokesman for the association. Late in the day, the group said the Transportation Department had responded by telling it to stop taking applications at midnight. The government and the dealers were concerned that buyers would close trade-in deals to buy new cars assuming they had a big rebate coming only to discover later that money was not available. CONTINUE READING...