(Source: Autoblog;  Detroit Free Press; US Infrastructure;  Autoblog Green)

Cash for Clunkers over, dealer deadline for filing extended indefinitely

The website has been down since yesterday morning, and the Transportation Department has officially extended the deadline for dealers to file their reimbursement requests twice now – once yesterday to noon today and again late last night. The second extension is open ended until the site comes back online and is able to handle the influx of dealer submissions.

The government website went down at some point before noon on Monday morning, presumably when dealers nationwide began submitting their final reimbursement requests from last weekend’s bonanza sell-a-thon. All the government is saying right now is that dealers will have any time lost while the site was down to submit their final paperwork.

The U.S. Department of Transportation said as of this morning 665,000 deals had been entered, for claims totaling $2.77 billion. That would mean about $130 million remains of the $3 billion set aside for the program, after $100 million the government expects to spend overseeing the program.

After thousands of dealers complained of being unable to enter deals before Monday’s 8 p.m. deadline, federal officials said the system would not be fully functional until today, and that dealers would be given additional time to submit papers. Click here to read the entire article.

Most fuel efficient cars available in the ‘Cash for Clunkers’ scheme (Not sure how useful this is anymore for buyers since c4c expired)

However, if you’re more environmentally conscious, you may want to know which are the most fuel-efficient cars available under the program.  To qualify as ‘eco-friendly’, new vehicles must get at least a EPA rating of 22 MPG combined to be eligible. Now that’s pretty bad, but it’s not like there’s a ton of car choices that get great MPG (at least in America). Click here to read the entire article.

Image Courtesy: US Infrastructure (click to enlarge)

Dealer poll calls Cash for Clunkers a ‘Nightmare,’ four out of 10 didn’t want program extended

A recent (admittedly unscientific) survey conducted by Automotive News shows that 44% of the 800 dealers polled wouldn’t want C4C to be extended again, even if the program was modified. Only 3% felt that the program should have been extended without being modified. The biggest issue dealers have with C4C is, unsurprisingly, its lack of timely payment. Some multi-store dealers have millions invested in the program, while little or no money has come in yet. An alarming 23% of dealers say they have had to borrow money to cover the cash crunch left in the wake of the Clunkers program, while an additional 10% say the program has actually sucked enough cash from the coffers that it has put the dealership at risk.  Click here to read the entire article.

Sen. Bill Frist uses Cash for Clunkers, junks Suburban for Prius

Apparently, it’s a common misconception that all Prius drivers are Democrats. Not true. In fact, recently retired Senator Bill Frist (R-Tenn.) just got himself a shiny new hybrid hatchback from Toyota. The former senator even got a few thousand dollars off the price of his new eco-friendly ride courtesy of the just-concluded Cash for Clunkers program here in the United States.  In an interview on Larry King Live, Frist responded to King’s quip that “You don’t see a lot of Republicans driving a Prius” with the response that the hybrid’s 50 miles per gallon along with the fact that “the taxpayer gave me $6,000 to do it” as reasons for the Prius purchase.  Click here to read the entire article.

(Source: Washington Post, New York Times, Bloomberg, The Detroit News, Autoblog)

The federal government’s Cash for Clunkers program began with a bang on July 24th and, despite the original plan having it last until Labor Day, will officially end next Monday night (August 24th) at 8PM. The end date was announced today by U.S. Transportation Secretary Ray LaHood and takes into account what he calls conservative sales estimates that have the pot running dry sometime over the weekend.

“This program has been a lifeline to the automobile industry, jump-starting a major sector of the economy and putting people back to work,” LaHood said in the statement.

As of today, C4C has recorded 457,476 sales worth $1.91 billion in rebates. The feds estimate about $400 million worth of rebates have yet to be submitted and are reserving another $100 million for administrative costs. That leaves $600 million left for what should be a very busy weekend on dealer lots.

After just a week, the program, which began July 24 and was expected to last until Nov. 1, ran out of the $1 billion originally appropriated by Congress. An additional $2 billion was approved two weeks ago, and it was supposed to last until Labor Day. Now that’s almost gone, too.

With the end in sight, many dealers are preparing for a flurry of last-minute customers over the weekend, and some are calling and e-mailing customers who were on the fence, perhaps threatening a surfeit of business.

“It’s not clear at all if there’s enough of the $3 billion to last through the weekend,” said John McEleney, chairman of the National Automobile Dealers Association. “My concern is if we go past the $3 billion between now and Monday.” He said, however, that he had been assured that the government has done calculations to make sure there is enough money left to get through the weekend.

In the days leading up to Thursday’s announcement, dealers and dealer groups said that uncertainties about the program’s ultimate conclusion were creating financial hardships and confusion. Among the organizations pressing for a resolution to the program was the National Automobile Dealers Association (NADA), which warned its members that “dealers who accept additional ‘clunker’ deals face a growing risk that they may not be reimbursed.”

Senate Majority Leader Harry Reid, a Nevada Democrat, asked LaHood in a letter today to speed up payments, saying “dealers have been forced to effectively finance the CARS vouchers for buyers until the dealers are reimbursed by the federal government, placing a strain on dealers’ balance sheets that, if prolonged, could eventually offset some of the benefits of the program.”

More than 1,000 people are processing the applications, LaHood said yesterday. That compares with fewer than 200 when the program began. The agency is training more of its staff and is using Citigroup Inc. contractors to handle the paperwork.

Also late today, Chrysler Group LLC joined General Motors Co. in announcing they will advance funds to dealers who are awaiting payment from the government for clunkers deals. The administration disclosed that it has paid just $145 million of the $1.9 billion in vouchers submitted — or less than 10 percent of the funds requested.

LaHood has been holding two or three meetings daily on the progress of the program in an effort to ensure an orderly shutdown.

The Alliance of Automobile Manufacturers, the trade association that represents General Motors Co., Chrysler Group LLC, Ford Motor Co., Toyota Motor Corp. and seven other automakers, praised the government’s handling of the program.

Click here to read the entire article.

(Sources: WSJ, NPR, LA Times)

Hundreds of auto dealers in the New York area have withdrawn from the government’s Cash for Clunkers program, citing delays in getting reimbursed by the government, a dealership group said Wednesday.  The Greater New York Automobile Dealers Association, which represents dealerships in the New York metro area, said about half its 425 members have left the program because they cannot afford to offer more rebates. They’re also worried about getting repaid.

“(The government) needs to move the system forward and they need to start paying these dealers,” said Mark Schienberg, the group’s president. “This is a cash-dependent business.”

Many dealers have said they are worried they won’t get repaid at all, while others have waited so long to get reimbursed they don’t have the cash to fund any more rebates, Schienberg said.  Schienberg said the group’s dealers have been repaid for only about 2 percent of the clunkers deals they’ve made so far.

“The program is a great program in the sense that it’s creating a lot of floor traffic that a lot of dealers haven’t seen in a long time,” he said.  “But it’s in the hands of this enormous bureaucracy and regulatory agency,” he added. “If they don’t get out of their own way, this program is going to be a huge failure.”

In contrast, today’s LA Times article notes that in California, which tops the list of states in terms of clunker transactions, most dealerships appear to be sticking with the program. The frenzy of buyer interest that greeted the program when it kicked off July 24 has dropped considerably partly because of shortages of popular cars such as the Toyota Corolla, Honda Civic and Ford Focus.

“The gold rush is over,” said Eric Choi, fleet manager at Hollywood Ford. “We’re still getting some business from it, but like every other dealer, we’re pretty much out of cars.”

Transportation Secretary Ray LaHood sought to reassure auto dealers Wednesday that they would be reimbursed for discounts given to customers under the program. With weeks-long delays in processing reimbursements, many dealers have feared the program’s $3 billion funding would run out before they received the money owed them.

An administration official said on Monday that the Transportation Department hoped to have 1,100 public and private sector workers processing the vouchers by the end of the week, up from a work force of about 350 through the end of last week.

Employees at a department service center in Oklahoma City have taken the lead in processing the vouchers, the official said, and workers have responded to calls for voluntary overtime to process the forms.

Meanwhile, Wall Street Journal reports that Obama administration will wind down its popular “cash for clunkers” incentive program on auto sales — and may do so as soon as early September, according to one person familiar with the matter.

When to end the program is a tricky question. The administration is closely watching the money remaining in the program, and expects there to be a surge in last-minute clunker deals once an end date is announced, said the person familiar with the matter. The administration wants to avoid having dealers agree to sales after all the funds have been used up, this person said.

Through Wednesday morning, dealers had submitted requests to be reimbursed for roughly 435,000 vouchers totaling more than $1.81 billion, though many of those hadn’t yet been approved.

The backlog at the National Highway Traffic Safety Administration also has dealers worried that authorities won’t know when the funding is gone, he said. “That has clearly been something that the industry has been constantly asking: When is it at $3 billion and one and there’s no money left? You need to have a soft landing kind of approach.”

Click here to read the entire article.

(Source: Green Car Congress, CNN & Streetsblog)

On Friday, President Obama signed into law H.R. 3435, which provides $2 billion FY 2009 emergency supplemental appropriations for the Consumer Assistance to Recycle and Save Program (Cash-for-Clunkers, C4C).

The additional $2 billion for the supplementary funding to keep the C4C program going is being transferred from the amount made available for Department of Energy–Energy Programs—Title 17—Innovative Technology Loan Guarantee Program in title IV of division A of the American Recovery and Reinvestment Act of 2009 (Public Law 111-5).

One of the arguments in favor of passing the bill prior to the Senate showdown, that offering $2 billion in extra “clunkers” cash would not amount to deficit spending, stems from Democratic leaders’ decision to shift the funds over from a Department of Energy (DoE) loan guarantee program.

(Source: NPR)

Pedal to the metal, Congress sent President Barack Obama legislation Thursday night with an additional $2 billion for “cash for clunkers,” the economy-boosting rebate program that caught the fancy of car buyers and instantly increased sales for an auto industry long mired in recession.

Images via Apture

The Senate approved the money on a 60-37 vote after administration officials said an initial $1 billion had run out in only 10 days. The House voted last week to keep alive the program, which gives consumers up to $4,500 in federal subsidies if they trade in their cars for new, more energy-efficient models.

Without action, lawmakers risked a wave of voter discontent as they left the Capitol for a monthlong vacation.

Supporters of the program hailed its effect on the auto industry — which had its best month in nearly a year in July — as well as its claimed environmental benefits.

“The reality is this is a program that has been working. Consumers believe it’s working. Small-business people believe it’s working. People who make steel and aluminum and advertisers … and everyone who’s involved in the larger economic impact of the auto industry believe it is working,” said Sen. Debbie Stabenow (D-MI).

The legislation had its share of critics, though, most of them Republicans.

“What we’re doing is creating debt. … The bill to pay for those cars is going to come due on our children and grandchildren,” said Sen. Judd Gregg (R-NH).

Officials said the program’s initial $1 billion probably already has been spent, but a paperwork backlog prevented an accurate accounting. The additional $2 billion is enough to help consumers purchase a half-million more new cars, they added.

There was no suspense about the outcome in the Senate, where supporters of the legislation focused their energies on defeating all attempts at amending the measure. Passage of any changes would effectively scuttle “cash for clunkers,” they said, since the House has already begun a summer vacation and is not in session to vote on revisions.

An attempt by Sen. Tom Harkin (D-IA) to limit the program to lower and middle-income consumers was jettisoned on a vote of 65-32. Gregg’s call for Congress to offset the $2 billion with spending cuts elsewhere also failed, 51-46.

The Senate’s debate capped an unusually swift response by lawmakers, who were informed scarcely a week ago that the program was quickly running short of money.

Click here to read the entire article.

(Source: AP via Yahoo & New York Times)

The Senate will vote to extend the popular “cash-for-clunkers” program before going home on Friday, Majority Leader Harry Reid declared Tuesday in a strong signal the government won’t let the trade-in rebates die under the surging demand that has almost exhausted federal backing.

Images via Apture

Reid’s GOP counterpart, Mitch McConnell of Kentucky, predicted his party would not block a vote and “the matter will be completed.” Republicans were still demanding a chance to amend a House-passed version that would extend the program into September, but Democrats were confident the bill wouldn’t be changed.

“There obviously is a real pent-up demand in America,” the Transportation secretary, Ray LaHood, said. “People love to buy cars, and we’ve given them the incentive to do that. I think the last thing that any politician wants to do is cut off the opportunity for somebody who’s going to be able to get a rebate from the government to buy a new automobile.”

Visiting the White House for a lunch with the President, Harry Reid, the Senate majority leader, was also asked about the program.

“We’ll pass ‘cash for clunkers,’ ” he said. And Mitch McConnell, Republican of Kentucky, who is the minority leader, said there would be a vote, but he did not suggest an outcome.  Opposition to extending the program has been dissipating. One vocal GOP critic, South Carolina Sen. Jim DeMint, said Tuesday he would not try to block the legislation. And three lawmakers who wanted the program limited to the purchase of even more fuel-efficient vehicles said Monday they would back the plan.

Republicans have said it puts the government in the bad position of picking winners and losers.

“People want to know what’s going to be next. Cash for shoes? Cash for groceries?” said Sen. Richard Shelby, R-Ala.

The first $1 billion in funding is expected to lead to sales of 250,000 vehicles and the additional $2 billion would generate sales of perhaps a half-million more vehicles.  The program has encouraged about a quarter-million Americans to buy new cars at time when the economy is still in recession and badly needs a boost.

Buyers of new cars and trucks have swamped formerly deserted auto dealers to claim their rebates — up to $4,500 when they trade in older models that get significantly worse gas mileage. The older vehicles are then scrapped.

Because the House has already recessed for August, any change by the Senate would effectively interrupt the rebate program until Congress returns in September. Consumers who don’t get in on a deal this week would have to wait until then to take advantage of the rebates, assuming eventual passage.

Click here to read the entire article.