By Martin H. Bosworth
ConsumerAffairs.com
July 31, 2009
The much-vaunted "Car Allowances Rebate System" (CARS)--more popularly known as "Cash For Clunkers"--where buyers could trade in their old gas-guzzler for a $3,500 or $4,500 voucher towards a more eco-friendly car, has been suspended after less than a week and roughly 250,000 cars sold.
The program certified 22,782 car trades since Monday, according to the National Highway Traffic Safety Administration (NHTSA), but a survey of automobile dealers found that there was a backlog of 25,000 trades still awaiting clearance. The agency also rejected many claims due to illegible or incomplete paperwork, according to the Detroit Free Press.
Many auto dealers around the country were reporting brisk business as a result of the program, while others were claiming the procedure for approval was too difficult and was leaving them unable to make transactions.
Processing the remaining transactions would have drained the program of its remaining funds due to the high demand, sources said, leading the Obama administration to suspend the program. Neither the White House nor the Department of Transportation had official statements on the program's closure at press time.
The program was criticized on a number of fronts, with Republicans and some Democrats claiming the cost would be too high and provide too little stimulation to the economy. Environmental activists claimed the program actually favored purchasing of SUVs and "crossover" vehicles, due to inconsistencies in the Environmental Protection Agency (EPA)'s mileage standards.
And it wasn't long before the program was announced that a proliferation of scam operations appeared, looking to take advantage of the expected flurry of business in the auto sales market.
