Cash for Clunkers, Bang and Bust!
cars in a dumpster, originally uploaded by rx8wej
Well folks, we’ve got some good news and some bad news…
First the good news. The Cash for Clunkers program has been a runaway success. The program shot off with a bang earlier in the month, and the government deserves a little praise for doing such a bang-up job of putting everything together. It has offered some much needed relief to the struggling automotive dealers and manufactures, and brought more than just a few clunker wielding consumers out of the woodwork. But there can be problems when you do a bang-up job of anything…
This is where the good news stops and the bad news starts. Yes, the Cash for Clunkers maybe a success, but it has been a little too much of a success, according to the Automotive News (subscription required to make the jump). The word on the street is that the program may have already run its course. In other words, it may have used up its allocated $1 billion (or coming close to it), and dealers and manufacturers are still pumping out the frothy deals like there was no end to this beer tap.
While some say the program is closer to only having used about $250 million of it funds, NADA is warning dealers that they sure better start to care, because as the funds dwindle, it just maybe them who is left with the check when the last congressman burps and gets up from the table. A survey taken by NADA has hinted to the possibility of a backlog of claims, which already exceeds $1 billion.
Dealerships might think the government is made of money with the way they’ve been pumping dollar bills into Chevrolet and Chrysler, but once the Cash for Clunkers reservoir dries up, there are no guarantees of reimbursement. NADA is recommending that dealers cool down on the hubbub of balloons, clowns, and dumpsters filled with subcompacts sitting outside their lots, and wait to make sure the funds will be reassured.
With that said, government spokesman Robert Gibbs has offered consumer’s the confidence to go ahead and purchase a new vehicle under the plan this weekend. He stressed that there was no need to panic, and consumers should just enjoy the great deals. The dealerships on the other hand…
yeah, you should worry!
August 5th, 2009 at 6:19 pm
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August 12th, 2009 at 3:08 pm
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