‘Cash for Clunkers’ payout nearly complete

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With final dealer payments being processed under the CARS program, the U.S. Department of Transportation announced last week that the agency has crossed the finish line for paying back eligible and complete dealer submissions.

“This is the final curtain call for a program that took the entire nation by storm and succeeded beyond expectations,” U.S. Transportation Secretary Ray LaHood says. “There can be no doubt that this program drummed up more business, for more people, in more places, at a time when our economy needed help the most.”

With the $3 billion provided by Congress to run the CARS program, consumers turned in gas guzzlers and bought nearly 700,000 more fuel-efficient vehicles in fewer than 30 days. In August alone, retail sales rose by 2.7 percent, due in large part to a notable 10.6 percent boost in sales by auto dealers.

Ford and General Motors recently announced production increases for both the third and fourth quarters as a result of the demand generated by the program. Honda also said it will be increasing production at its U.S. plants in East Liberty and Marysville, Ohio, and in Lincoln, Ala.

In addition, the program provides good news for the environment, a 60 percent improvement in fuel economy between the trade-in and new cars purchased.

“When the federal government and the private sector team up to take bold action, the American public reaps the rewards,” LaHood says. “Working together, we have delivered on our promise to improve the environment, create jobs and get this struggling economy back on its feet, not to mention the millions of dollars the CARS program generated in local and state sales tax revenue to help cash-strapped states.”

To date, 98 percent of CARS program rebates totaling $2,799,077,000 have been approved for payment under the program. All applications for rebates have been reviewed at least once, and all eligible and complete applications have been approved for payment. The agency will continue to work directly with dealers to help them correct and complete the remaining two percent of submitted applications.

The government reached this milestone in payment of valid submissions just 90 days after the law creating this program was enacted, 60 days after issuing its rule setting the requirements for the program, and 30 days after closing the program due to exhaustion of funds.