The government’s cash for clunkers program has been so popular it's close to running out of money.
The Transportation Department called members of Congress on Thursday to say they might have to suspend what is formally known as the Car Allowance Rebate System as early as Friday due to extremely heavy demand that threatens to exhaust funding.
The rebate plan, which pays $3,500 or $4,500 to owners of old cars and trucks who trade them in for new, fuel-efficient vehicles, had started operation only last week.
Head to your dealership on Saturday
"If you are going to buy a car this weekend, if you want to go take advantage of this program at a dealership on Saturday, the program will be in place," Mr. Gibbs said. "The administration and bipartisan leaders of Congress are working this morning to find ways to continue to fund this program."
On a day when the government announced that economic output (gross domestic product) fell at an annual rate of 1 percent in the April to June quarter, a program that boosts car sales is especially appealing to automakers, who find themselves in the middle of the worst slump in a quarter-century.
“By all accounts this program appears to be a success for car buyers, for car dealers, for car companies, and for taxpayers who are seeing people choose more fuel-efficient cars,” Gibbs argued. The cash for clunkers effort “can, should, and will be” extended, he said.
Uncertain end date
But Gibbs acknowledged that he could not say how long the rebates will be available. That will depend on how much additional cash Congress and the administration can find to devote to the effort. The program was designed to last until Nov. 1 or until the money ran out.
A survey of 2,000 dealers by the National Automobile Dealers Association found about 25,000 rebate deals were pending but had not yet been approved by the government, the Associated Press reported. With some 23,000 dealers taking part in the program, those survey findings gave rise to concern that available funds had already been committed.
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