LIL’ BUDDY’S BLOG – Is “Cash for Clunkers” Program Running Out of Gas?
LIL’ BUDDY’S BLOG – Is "Cash for Clunkers" Program Running Out of Gas?
THE CHICAGO IL REAL ESTATE MARKET AND OTHER THINGS CHICAGO FROM THE POINT OF VIEW OF A LITTLE WHITE DOG!
Team Leader Dean used to drive a fancy Acura RL. A very hot ride let me tell you!
But the high price of Premium Gas – over $4.50/gallon during the summer of 2008 – combined with the lower gas mileage obtained from this powerful all-wheel drive car forced him to change his thinking. Dad now hits the road in his more-fuel-stingy but still very stylin’ four-cylinder Honda Accord. BTW . . . the Accord runs on Regular Gas.
Today here in Chicago all the buzz has centered on the new Federal Government Cars for Clunkers Program (it’s acronym you dogs – "CARS" for the Car Allowance Rebate System.) Under the program drivers can trade in their old gas-hog car if it’s on a special list of old gas-hog cars and receive up to a $4500 Fed-funded rebate toward the purchase of a new more fuel-efficient vehicle.
That is if that new vehicle is on the special list of fuel-efficient cars.
The old car must be crushed quickly – hopefully after the sellers get out of the car after it is traded in. It cannot be resold!
Thus the Fed is hoping to permanently take these gas hogs off the road improve fuel economy and hopefully give our ailing auto industry a bit of a sales boost in the process.
One problem however!
As reported in a Chicago Tribune story today by reporters Martin Zimmerman Tiffany Hsu and Jim Puzzanghera nearly as quickly as the Cash for Clunkers program became the hottest advertising theme for Chicago New Car Dealers just as it is beginning to drive traffic and sop up excess inventory in New Car Lots across Chicago and the Suburbs – the popular CARS Program is running out of money and may quickly end less than a week after it began!
The program it appears has uncovered considerable untapped demand to buy new cars and the rebate incentive has gotten humans and their dogs running to their dealerships clunkers in tow ready to cash in.
But the Fed allowance of $1 Billion to fund the program is nearly gone. Since the program began on July 24th the Federal Government has paid roughly $150 Million to car dealers accepting the old clunker cars in trade. About $850 Million more rebate requests are pending from dealers.
Although the White House said yesterday that all pending requests will be honored it is uncertain that more CARS money will be made available to keep the program going. Some Washington Lawmakers are balking at earmarking more money for the program.
Some including Senators Diane Feinstein (D-CA) and Susan Collins (R-Maine) favor further tightening the fuel efficiency requirements for new cars to qualify. Currently the new cars acquired have to attain at least 18 miles per gallon combined city and highway fuel efficiency. The Senators’ proposals would increase that to 20 MPG.
And to further complicate things the program expressly forbids dealer reimbursement of the $3500 or $4500 rebate if the Fed money runs out. It also requires the dealer to permanently disable the vehicles before applying for the rebate. If funds run out and the dealer has already junked the trade in and awarded the rebate to the new car buyer he may be stuck with a clunker of his own not able to run or be resold and be out of pocket as much as $4500.
In the minds of human consumers the Cash For Clunkers is a good thing. Ahhh . . . but when the money runs out all too quickly then what will the long-term impact be?
Inquiring canine minds would like to know!
Enjoy the weekend you dogs! In Chicago – it’s going to be a beautiful Summer Weekend!
YOUR ACE REPORTER ON FOUR PAWS
BUDDY HOLLY MOSS & DEAN’S TEAM CHICAGO
