The Car Allowance Rebate System, Also Known As the "Cash for Clunkers" Program Ends
The Car Allowance Rebate System (CARS), colloquially known as "Cash for Clunkers," is a U.S. federal scrappage program intended to provide economic incentives to U.S. residents to purchase a new, more fuel efficient vehicle when trading in a less fuel efficient vehicle. The program was designed to provide stimulus to the economy by boosting auto sales, while putting safer, cleaner and more fuel-efficient vehicles on the roadways. Although the program officially started on July 1, 2009, the processing of claims did not begin until July 24.
On August 20, United States Secretary of Transportation Ray LaHood announced that the program would end on Monday, August 24, 2009 at 8 p.m. Eastern Time, the deadline established for dealers to submit applications to be reimbursed for the rebates. As of August 20, the DoT reported more than 457,000 dealer transactions corresponding to $1.9 billion in rebates.
According to estimates of the Department of Transportation, the $1 billion appropriated for the system was exhausted by July 30, 2009, well before the anticipated end date of November 1, 2009, due to very high demand. Government and industry estimates agree that around 250,000 vehicles were sold under the program in less than a week. In response, Congress approved an additional $2 billion for the program with the explicit support of the Obama Administration. On July 31, 2009 the House of Representatives approved the extra $2 billion to the program, and the Senate approved the extension on August 6, defeating all six amendments presented. President Barack Obama signed the bill into law on August 7, and government officials expect that the additional funds will be exhausted by Labor Day.