US government clunker
Cash-for-clunkers scheme hits major trouble after five daysThe future of the United States' Car Allowance Rebate System (CARS) -- or cash-for-clunkers scheme -- hangs in the balance after only a week after starting. New funding is being pushed through the Senate this week to try and keep the scheme alive amid reports the program has chewed through almost all of its initial finance.
The CARS program began last Monday with the US Government committing US$1billion which was expected to see it through to its planned end in November. But by Thursday night there was speculation that the scheme was about to be suspended amid reports that all the money had been spent.
This was in addition to reports that a survey of 2000 dealers showed there was a backlog of 200,000 claims and widespread frustration amongst dealers about the complexity of the rebate claims system.
That meant a hectic Friday in Washington with the White House adding a further US$2billion in funding to keep CARS going. The bill passed through Congress on Friday but still needs to get approved by the Senate before the money becomes available.
It was an embarrassing outcome for the government ahead of the first selling weekend with the scheme in place. But it also shows a lot of demand for new cars in America after so many months of disappointing sales.
Initial reports by the National Highway Traffic Safety Administration, the body charged with overseeing CARS, indicate the biggest winner of the program has been Ford. The Detroit News is reporting with 80,500 CARS transactions processed the Ford Focus has emerged as the top-selling car people are trading clunkers for.
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