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Cash for Clunkers ends on Monday

Posted by Clifford Atiyeh  August 20, 2009 04:46 PM

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The federal government said Thursday afternoon that it would shut down its Cash for Clunkers rebate program by 8 p.m. on Monday, Aug. 24.

The shutdown affects new deals submitted after the deadline, but the government has insisted that existing deals will be honored.

The news came shortly after an Automotive News report this morning cited a survey conducted by the National Automobile Dealers Association, which estimated that all of the program's money had been committed.

About $1.9 billion of the total $3 billion allocated has been claimed, according to the Department of Transportation, and dealers, according to the Detroit Free Press, have roughly $400 million in deals they haven't submitted.

"This program has been a lifeline to the automobile industry, jump starting a major sector of the economy and putting people back to work," US Transportation Secretary Ray LaHood said in a press release. "At the same time, we've been able to take old, polluting cars off the road and help consumers purchase fuel efficient vehicles."

While the program has generated an estimated 700,000 new car sales, the program's complex rules and paperwork &mdash which requires dealers to sell vehicles before getting reimbursed by the government &mdash has triggered a torrent of backlash from car buyers who have been waiting weeks without a new ride.

"It's not inspiring confidence with the dealers or with me," said Paige Dickinson of New Bedford, who traded in her 1996 Jeep Cherokee for a 2009 Honda Fit. "[The dealers] are in a bad position, too. It's a clog-up."

Only about 1 percent of rebates submitted by Massachusetts dealers have been approved, according to Robert O'Koniewski, executive vice president of the Massachusetts State Automobile Dealers Association. About $4 million worth of rebates have been submitted, O'Koniewski said, who called the program "an administrative nightmare."

"The fact that it's ending will be a sigh of relief for everyone involved," he said. "There's a lot of money on the street and dealers aren't getting any of it."

Thomas Tague, who traded in his daughter's Jeep Cherokee for a Mini Cooper, said he's still waiting for his new car, despite numerous phone calls to the dealer.

"Their story seems to be consistent that they're not going to release cars until they get approvals," he said.

O'Koniewski said that his organization has advised dealers to ask customers to voluntarily sign contingency agreements, meaning that customers would be obligated to pay back the dealer if the government rejected the trade-in. The government has repeatedly said that customers are not required to do so.

"Dealers, individually, have spent millions of dollars in inventory," he said. "They don't get these cars for free."

Dickinson said her dealer told her she could pay the $4,500 to pick up her new Honda, but she said she refused, and is still waiting.

But Paul Stone of Manchester-by-the-Sea said that his dealer "cut through paperwork pretty quickly" when he purchased a new GMC Sierra in July.

"It was a good deal all the way around," he said.

This blog is not written or edited by or the Boston Globe.
The author is solely responsible for the content.

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25 comments so far...
  1. Toyota says "Thank You" to obama.

    Posted by Big Jim August 20, 09 05:03 PM
  1. I did get $4500 off my new car.. Thank you for paying for it....

    Posted by duckman August 20, 09 05:04 PM
  1. Interesting. The article quote's a woman critical of the program who successfully participated in the program? There in no end to compaling Americans...

    Posted by Orange Julius August 20, 09 05:15 PM
  1. Send thank you notes to all of us who pay taxes--we are the ones who are paying the price!!

    Posted by Dick Pru August 20, 09 05:17 PM
  1. Duckman,

    When do I get to drive *our* car? My taxes financed it as well.

    Posted by kneo August 20, 09 05:18 PM
  1. My clunker did not qualify. I still had to buy a used minivan at top price. I would have liked to get a new car with $4,500 off, but, what the heck... I am really glad that my taxes paid for everyone else. I like paying taxes.

    Posted by igot theshaft August 20, 09 05:20 PM
  1. Next up on the docket.....screwing up our Healthcare!!! Cant wait for the Fed to cut a Public Option and leave millions without healthcare.

    Posted by Mattytars August 20, 09 05:24 PM
  1. Kneo,

    You get to breathe *our* clean air and be employed by *our* economy.

    Posted by E August 20, 09 05:30 PM
  1. I got my $4500 pretty quickly
    and I must say I am pretty well off :)

    It's about time they gave some welfare to the rich.

    Thanks Barney Frank, and also thank you Obama

    We need more stimulus programs for the rich !

    I am hoping they have a stimulusd

    How about $0100

    Posted by Living large August 20, 09 06:14 PM
  1. "The fact that it's ending will be a sigh of relief for everyone involved," he said. "There's a lot of money on the street and dealers aren't getting any of it."

    This is why the dealers are in trouble. This quote states they [dealers] didn't did any of the money. True, but what about it gives them the business and gets their inventory moving again!!!!!!

    Posted by Scott C August 20, 09 06:29 PM
  1. With GM ads saying YES you CAN buy a TRUCK with your Cash for Clunker money, I'm glad the program is done. It obviously had about as much effect on their selling high-mileage vehicles as the Japanese auto industry's dominance of the market has for years. Too bad for them it didn't continue so they could go back to making unreliable gas hogs, begging for government handouts and keeping their heads where the sun doesn't shine for another 20 years!

    Posted by TrueFaith August 20, 09 07:17 PM
  1. Hello ! - Your taxes did not pay for this clunkers program...... Your children's children will pay for it.....

    Posted by scott August 20, 09 07:18 PM

    Posted by Joel DErrico August 20, 09 07:21 PM
  1. Not to mention the $$$ that the state collected on each sale at 6.25% and the added money the towns/cities gets in new excise taxes. It's a disaster all right.

    Posted by lm August 20, 09 08:08 PM
  1. Kudos!! My husband got called back to work at the Chicago Ford Plant!! Something went right, finally!!!

    Posted by Sherry August 20, 09 08:38 PM
  1. I am long overdue to replace my 17-year-old Honda Accord, but a '92 Accord - with mileage in the low 20s - does not qualify for the Cash-for-Clunkers program. That means, of course, that I need to wait for the car market to settle back down before I go shopping. It's clear to me that the program, by bankrolling a portion of the buyers, effectively stops the rest of the buyers in their tracks.

    Posted by tonyt August 20, 09 11:07 PM
  1. I think that Cash-for-Clunkers was a good idea but poorly executed and, of course, the product of political compromise. To be effective, it needs to be one small part of a comprehensive effort to get polluting, gas-hog vehicles off the road. Another piece of that puzzle should be annual federal excise taxes for low MPG vehicles. There's no point in offering a carrot without a stick close behind.

    Posted by tonyt August 20, 09 11:12 PM
  1. Both trucks are car qualify for the Cash For Clunkers but not the motorcycles.


    Posted by jhenry August 21, 09 01:32 AM
  1. That's great to hear Sherry.

    And duckman, you are welcome. I wish I could have taken advantage of this rare opportunity.

    Nissan Versa new MSRP $9,990 -$4,500= $5,450 plus the cost of options. Insanely good price seeing as I paid $5500 for a 1993 Mazda MX-5 conv. in 2006. The Versa will have a full warranty and be brand new to the consumer.

    Ford Focus MSRP $15,995- $4,500 -$3,500(dealer incentive)= $7,995 for NEW!!!

    Same goes for other vehicles in this price range. They may be a little mundane but the profits going to the companies will help create new interesting vehicles in the future. And by then I hope to benefit by buying a well made interesting vehicle.

    Thank you to all that have purchased vehicles. And I'm not a car salesman.

    Posted by Andy August 21, 09 09:01 AM
  1. Scott C,
    Your comment reminded me of that old joke: "We lose money on every car, but we make up for it in volume!"

    Posted by TomD August 21, 09 01:35 PM
  1. We all ought to be glad that we paid back Obama's debt to the auto worker's union. Now Detroit will go back and overstock vehicles that no one wants unless they give them $4000 off and stagnate the inventory again. The auto dealers will have no sales for three months due to the bulge in buying these past few weeks, but then, they didnt shower the campaign with money that the auto workers did. Nor did they receive all that bail out money.

    Hey, guys, I hope you enjoy "my" car....built by "my" workers. What's good for Government Motors is good for America.

    Posted by timfromvt August 22, 09 07:34 AM
  1. Let me see if I get this straight. Car dealerships were absolutely dying, closing left and right. The economy is dead in the water. We have a planet headed toward environmental disaster due to carbon emissions. There's a program that addresses all those things and you people are screaming about the paperwork taking too long. You're either trolls or fools. Or both. As for the guy breathing "a sigh of relief" the program ending will certainly relieve dealers of all their customers. Enjoy.

    Posted by Bob August 22, 09 09:32 AM
  1. Please do the math. You wrote "About $1.9 billion of the total $3 billion allocated has been claimed..." In reality less than four percent of all applications have been approved to date. That's 76 million. Until the deals are approved, 1.9 billion has not been claimed. At the rate the DOT is processing these claims there is no way they give out 1 billion let alone the 3 billion passed for the program.

    In the mean time, five weeks ago we signed orders for 2 cars and the dealer, Flemington Car and Truck Country, Flemington, New Jersey refuses to deliver the cars to us. So, where's our little slice of the $3 billion pie?

    Posted by Dr. B August 23, 09 10:00 AM
  1. Money aside I think this program allowed people to not only buy more fuel efficient cars but safer ones too.

    Say a single mother with 2 kids was able to trade in her car which she got in high school( and it was old then). With a limited budget she will be able to trade in that 1980's car for a Ford Focus, acclaimed as the safest in its class. That's a great change for someone who never thought they could afford to make such a change. And with the full warranty its one less unexpected cost that usually comes with owning an older car.

    Posted by Archer August 24, 09 08:54 AM
  1. This Cash for Clunkers program is just another disastrous example of how WRONG the Nazi-liberal Democrat agenda is! Guess what folks? That $4500 you got off on that new car is coming right out of OUR OWN TAX DOLLARS! GOOD RIDDANCE to this awful, awful example of bloated liberal government waste. You, your children, and your children's children will be paying off Obama's debt for generations!

    Posted by VoteGOP August 24, 09 01:41 PM

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Clifford Atiyeh is an automotive writer and car enthusiast . He has spent his entire life driving cars he doesn't own.
In the garage: 1995 21-speed Iron Horse, 2002 Jeep Wrangler X (by association)
Bill Griffith is a veteran Boston Globe reporter, having reviewed cars for more than 10 years and serving as assistant sports editor for 25 years. He was also the paper's sports media columnist.
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AAA's Car Doctor, John Paul John Paul is public affairs manager for AAA Southern New England, a certified mechanic, and a Globe columnist. He hosts a weekly radio show on WROL.
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