Cash for Clunkers ends after two-month run

The program ended Monday night.

By Victoria Guida

Published Aug. 28, 2009

The Cash for Clunkers program, which increased car sales and removed some fuel-inefficient cars from the road, ended its two-month run Monday and left some car dealers waiting for a delayed reimbursement.

The program, officially known as The Car Allowance Rebate System, began July 1 and offered up to a $4,500 rebate to people who would turn in their old cars or clunkers. The objective of the program was to get less fuel-efficient cars off the road and to help motivate customers to buy new cars during a difficult economic period. Congress initially allotted $1 billion for the program, and then added an additional $2 billion when those funds were depleted after the program's first week.

The Department of Transportation reported 690,114 dealer transactions, totaling $2.877 billion in rebates.

Although Cash for Clunkers has increased car sales, Dodge City Motors General Manager George Madison said he wasn't impressed with the program.

"They did a horrible, horrible job," Madison said. "There's no way anyone could've done worse than the government did on this. They took something that should've been relatively simple and made it terribly complicated."

For traded-in vehicles, Madison said dealerships had to fill out 20 to 30 pages of information. He said they could've simplified the process by building a Web site and adding a VIN decoder.

"Instead, they asked for pages and pages of useless information that they now have to have people go through," he said. "They spent $50 million on something that they could've done for next to nothing."

In addition, Madison said Dodge City Motors, which sells Hyundai and Mahindra, had 20 cars turned in for the rebate, but has only received reimbursement for two of them.

"I don't know if they'll pay us anything," Madison said.

Yancey Auto Parts Owner Dean Yancey said the program has been a nightmare for dealers.

"It's been a very big headache for the dealer in getting paid for the car," Yancey said.

Yancey said there is no doubt the program has augmented car sales over the past couple months.

Madison also said the program prompted a mild increase in sales, a point the Department of Transportation stressed in their official statement.

"This program has been a lifeline to the automobile industry, jump starting a major sector of the economy and putting people back to work," U.S. Department of Transportation Secretary Ray LaHood said in the release. "At the same time, we've been able to take old, polluting cars off the road and help consumers purchase fuel efficient vehicles."

Customers wishing to trade in their old vehicles simply needed to bring the title and registration on the car, proof of insurance and the mileage on the car.

"It was very easy," Fulton resident Lola Dzurick said. "The salesman just gave me a checklist, I pulled everything out of the glove compartment and brought it back to him."

Dzurick got $3,500 for her 20-year old, six-cylinder van.

"I had been looking for a new car over the summer," Dzurick said. "Actually, I was able to get way more for my clunker than I'd ever have gotten if I'd tried to sell in another way. It was not nearly worth $3,500, so it was a good deal for me."

Yancey said after being traded in, clunkers are crushed so they can be recycled and made into steel products. He said all the engines are deemed fuel-inefficient and then destroyed.

Dzurick bought a car that gets a few more miles to the gallon than her previous automobile, and the DOT reports most buyers traded in their cars for ones with a 60 percent gas mileage improvement.