Cash For Clunkers So Popular It May Have To Be Suspended

UPDATE July 31, 2009

: Cash For Clunkers survives at least through this weekend. The White House says it will honor all cash for clunker sales for the time being. However, Congress will need to approve more funds for the program to continue much longer.

< the weekend
For the most current updates on the program check out www.cars.gov

According to The New York Times, the government will honor all deals completed by midnight Thursday, July 30th in the "Cash For Clunkers" program. However, automobile dealerships have no idea how quickly the government is going to reimburse them --and that is causing dealerships, already cash strapped, to be very concerned.

The government had allocated around $1 billion dollars to help the owners of clunkers trade in their cars for newer, more efficient models. The program, which officially began last week was supposed to run through November, or when the program ran out of money. Looks like in the first few days of the program almost all of the money has been spent.

The reports that the CARS program could be suspended created confusion among many dealers, who had showrooms filled with car shoppers looking to scrap their gas guzzlers.

Alan Helfman, general manager of River Oaks Chrysler Jeep in Houston, said he was worried that the government wouldn't pay for some of his clunker deals. His dealership has completed paperwork on about 20 sales under the program, but in some cases the titles haven't been obtained yet or the vehicles aren't on his lot.

"There's no doubt I'm going to get hammered on a deal or two," Helfman said.

The clunkers program was set up to boost U.S. auto sales and help struggling automakers through the worst sales slump in more than a quarter-century. Sales for the first half of the year were down 35 percent from the same period in 2008, and analysts are predicting only a modest recovery during the second half of the year.

Meanwhile,there are conversations between Congress and The Obama Administration to figure out how to continue the program. The original goal was to get one million clunkers of the road.