No Cash for Clunkers (CARS) Program Proposed to Support Auto Industry

2021 Update – Given the chip shortage and surge in new and used car prices, no government programs were put in place as part of the various stimulus packages to support the Automotive industry. There are however Electric Vehicle (EV) credits and tax breaks in the bi-partisan infrastructure bill.

[2020 update] With the auto industry seeing its worst month of sales, Congress is pushing for a new cash for clunkers program for 2020. Firm details are yet to be released but I will post updates when available. 


The U.S. government’s $1 billion “cash for clunkers” – CARS program looks to have run out of money after just one month as demand for the program has far exceeded expectations. However, in an emergency session the House of Representatives approved a funding measure to allocate another $2 billion (from the from the $787 billion stimulus plan) to fund the program. It will now go to the Senate for approval next week.

The CARS program provides as much as $4,500 toward the purchase of a new car when an older, less fuel-efficient, vehicle is turned in. Officials said that all existing vouchers issued until today (7/31) will be honored, but conceded that the additional funding is needed to keep the program going.

** Take advantage of the CARs program quickly before it really does get suspended by Getting your best new car quote from Yahoo! Autos first **

Lawmakers had expected the program to generate about 250,000 vehicle sales and to have enough money to last until about Nov. 1.

“Any doubt that the CARS program would jump-start auto sales is completely erased,” said Greg Martin, a General Motors Co. spokesman to Bloomberg. “More than 200,000 cleaner, more fuel-efficient cars are on the road and a vital industry gets a needed boost. We hope there’s a will and way to keep the CARS program going a little bit longer.”

“We had a lot of good feedback from dealers as far as how much traffic they had as a result of this program,” said Greg Thome, a spokesman for Toyota Motor Corp. “Everybody is surprised that the popularity was that immediate.”

Charles Cyrill, a spokesman for the National Automobile Dealers Association, said, “If the program is indeed suspended, NADA will continue to work with the Department of Transportation to emphasize the importance that every dealer is reimbursed for a valid deal.”

The Transportation Department had said earlier this week that the money wasn’t running out. “When we get close, we will start alerting dealers so they don’t get caught with a deal in the pipeline,” said Rae Tyson, a department spokesman, in an interview July 28. “We’re not going to leave them hanging. We’re not going to run out of money in a couple days.” [Clearly not true given the recent house actions for emergency funding!]

The administration’s reports on clunkers applications from dealers didn’t indicate that the funds were near exhaustion. The National Highway Traffic Safety Administration, which is running the program, said yesterday that 22,782 vehicles worth $95.9 million had been sold. However, this number looks to be hugely understated according to various officials. “This was a very successful program, maybe even too successful,” Senator Charles Schumer, a New York Democrat, said yesterday in a statement. “The program should continue, but perhaps with a tune-up so that we get the most stimulus, conservation and efficiency for the buck.”

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