WASHINGTON (Aug. 24, 2009)—The Obama administration is ending its $3 billion Car Allowance Rebate System, better known as CARS or “Cash for Clunkers,” on Aug. 24, more than two months prematurely.
The CARS program, originally funded by a $1 billion appropriation from Congress and set to run between July 1 and Nov. 1, proved so popular that it had to have an extra $2 billion appropriation to continue through the end of July. With the newly approved funds on track to run out by early September, the Department of Transportation, which administered the program, saw no choice but to halt it.
Under the system, consumers were eligible for vouchers of either $3,500 or $4,500 if they traded in vehicles obtaining 18 mpg or less in favor of one getting 22 mpg or better. The auto aftermarket opposed the program, objecting to the administration's plan to junk the old vehicles. However, in response to the protests, the bill's sponsors added amendments exempting vehicles 25 years old or older from the program and allowing drive train parts from the junked vehicles to be recycled and sold separately.
Auto dealers must submit all CARS-related transactions to the DOT before 8 p.m. Aug. 24, according to the American International Automobile Dealers Association.