The Transportation Department said Thursday the government will wind down the program on Monday at 8 p.m. EDT. Car buyers can receive rebates of $3,500 or $4,500 for trading in older vehicles for new, more fuel-efficient models.
Through Thursday, auto dealers have made deals worth $1.9 billion and are on pace to exhaust the program's $3 billion in early September. The incentives have generated more than 457,000 vehicle sales. Administration officials said they have reviewed nearly 40 percent of the transactions and have already paid out $145 million to dealers....
I have always wondered about the true success of Cash for Clunkers. I think Washington was too quick to call this program a success without first checking for fraud. It just strikes me as funny that under this economy, with so many Americans fretting about their jobs, that so many of them would rush out and buy new cars with payment schedules no less.
Something tells me months from now we are going to hear that there was some big scam going on. I know if I owned a dealership I would have found Cash for Clunkers an excellent way to move new stock and rid myself of worthless trade-ins.
Here is what I would have done. I would have taken all my crumby trade-ins that were worth less than $4,500 and use them as clunkers to purchase some of my new inventory. I would have then taken those new cars I purchased and put them on the used car side with a hefty $3,000 to $4,000 discount off the sticker price. In doing so, I would have improved my used car inventory quality, rid myself of hard to sell clunkers and improved my new car sales figures by decreasing my new car inventory. Not to mention I would be picking up anywhere from $500 to $1,500 per car in the process.
Time will tell if there were real sales going on or if some enterprising individuals found a way to game the system. My money is on gaming the system.