Have you been thinking about taking advantage of the Cash for Clunkers program? If so, you’d better hurry… Transportation Secretary Ray LaHood has announced that the program will end at 8PM on Monday due to dwindling funds.
This program has been a mixed blessing for the auto industry. The cash incentives have resulted in increased sales, but reimbursement delays have simultaneously created a financial burden on cash-strapped dealers. Some dealers have already dropped out of the program due to cash flow problems created by the delays.
It’ll be interesting to see what happens to new car sales after the program ends. I’m guessing that these rebates did little more than cannibalize future sales, such that car lots will be a very lonely place by next week. Then again, because the clunkers must be destroyed, a used car shortage could help prop up new car sales.
As an aside, charities that depend on used car donations are none too happy about the clunker-destruction requirement.