What do you think? Leave a respectful comment.

The video for this story is not available, but you can still read the transcript below.
No image

Popular ‘Cash for Clunkers’ Program Winds Down

The government is ending its popular 'Cash for Clunkers' program two months early due to dwindling funds. Jeffrey Brown speaks with an automotive journalist about its impact on the auto industry and the economy.

Read the Full Transcript


    Coast to coast today, car buyers were racing the clock to cash in their clunkers.


    We're coming out today just because we knew it was ending soon.


    The popular rebate program ends this evening, a month after the government began offering $3,500 or $4,500 vouchers toward the purchase of a new, more fuel-efficient vehicle with the trade-in of an older gas guzzler.


    Four-wheel drive. It's all heavy duty, lock-out hubs.


    I get eight miles to the gallon, and I'm ready for something with better gas mileage.


    The idea: stimulate demand in the troubled car market and help the environment at the same time.


    That's what our economy needs, is some excitement to get the juices flowing. That's what our economy is based on, is people buying things.


    The $3 billion set aside is almost gone. The first billion went out the door in less than a week; then Congress put $2 billion more in.

    Car sales increased dramatically. Through this morning, dealers nationwide have submitted 625,000 vouchers worth nearly $2.6 billion.

    Geoff Pohanka runs the Pohanka Automotive Group that has 15 dealers in the Washington, D.C., area.

  • GEOFF POHANKA, Pohanka Automotive Group:

    We've seen a definite upswing in business from the Cash for Clunker business. And our dealerships, our sales has spiked since the program came out. It's been a wonderful program, and it certainly stimulated other businesses, non-Cash for Clunker business, as well.


    Sales were especially important for the American auto industry, part of which has been on government life support. General Motors hired 1,300 workers. Other carmakers are paying overtime.

    As of Friday, American cars had accounted for some 40 percent of the sales in the program. The top selling vehicles as of last week: the Toyota Corolla, the Honda Civic, and Ford Focus, compact cars that get good gas mileage.

    But there have been problems throughout the process. In the last days, many dealers have not yet been reimbursed. Some are waiting on millions of dollars. To date, just 10 percent of the rebates have been paid out.

    A 13-page federal form is required for each clunker a dealer accepts. And with thousands of forms to file before the deadline at 8 p.m. Eastern time, dealers complained of government computer crashes or slowdowns.


    It's currently frozen up now. It's been three hours.


    Many dealers stopped offering the rebates over the weekend to make time to get the paperwork filed.


    It's been a bureaucratic nightmare. It's a very complex program, which should be a simple process, trade in an old car and a new car, but it's made very difficult and cumbersome with the regulations.


    The National Automobile Dealers Association asked for a filing extension until August 31st. This afternoon, the Department of Transportation did extend the deadline, but just to noon tomorrow.

    Despite the bureaucratic gridlock and other concerns, Pohanka says the program has helped the bottom line.

The Latest