Popular Car Rebate Program Ending Monday

The Obama administration is ending the "cash for clunkers" program on Monday. The incentives generated nearly 500,000 vehicle sales and deals worth nearly $2 billion. Many dealers complain the government has been slow to reimburse them, but President Obama pledged Thursday to remedy that.

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RENEE MONTAGNE, host:

This is MORNING EDITION from NPR News. I'm Renee Montagne.

STEVE INSKEEP, host:

And I'm Steve Inskeep. Time is running out if you want to trade your gas guzzling clunker for a more fuel-efficient car and get a government rebate for doing it. The Cash for Clunkers program will officially end at 8:00 in the evening Monday, Eastern time. It has succeeded well beyond expectations. And in a moment, we'll hear about laid off autoworkers who've been rehired to meet the demand for new vehicles.

MONTAGNE: But there have been glitches in the Cash for Clunkers program. Many dealers say the government has been painfully slow in reimbursing them for the rebates they've already paid out. President Obama pledged to remedy that yesterday. NPR's Brian Naylor reports.

BRIAN NAYLOR: Cash for Clunkers started as a $1 billion program, but its popularity prompted Congress to add two billion more. Now that money is running out. The government says as of yesterday, more than 450,000 cars were sold under the program, adding up to $1.9 billion, and that it's time to bring the program, as one administration official put it, in for a soft landing.

Speaking on a Philadelphia-based radio talk show yesterday, President Obama said the program has been a hit.

President BARACK OBAMA: It has been successful beyond anybody's imagination. And we're now slightly victims of success because the thing happened so quick, there was so much more demand than anybody expected, that dealers were overwhelmed with applications.

NAYLOR: The demand was sparked by rebates totaling as much as $4,500. But some dealers have pulled out of the program, claiming they can't afford to front the rebate cash to anymore customers until they get reimbursed by the government. Mr. Obama said his administration is addressing the backlog, tripling the number of government workers on the program.

Pres. OBAMA: I understand dealers want to get their money back as soon as possible, but the fact of the matter is this is a good news story. They are seeing sales that they have not seen in years.

Unidentified Woman: David, please (unintelligible) on one. David (unintelligible) on one, please.

NAYLOR: At the FitzMall Hyundai and Subaru dealership in Rockville, Maryland, general manager Scott Addison calls Cash for Clunkers a huge success.

Mr. SCOTT ADDISON (General Manager, FitzMall Hyundai and Subaru): We've delivered more cars than we expected. In fact, we're just about out of inventory on a lot of products. We're ordering - we're actually putting deals together on cars that aren't here yet, you know, in anticipation of this program working out through this time period.

NAYLOR: But it's not been without its headaches. Addison shows me a thick file that his sales people must submit to the government for each deal they make under the clunkers program.

Mr. ADDISON: I need proof of registration on the vehicle. And so what I've got to do is I've got to show the current registration, that it's currently registered. If there's a lien, I've got to have a lien payoff. Otherwise, that's not going to be qualified. This is their form. It's a five-page certification. It's an affidavit that the dealer's making, signing and agreeing to.

NAYLOR: And if something's not right, Addison says, the government sends the whole packet back. He says his dealers have received about 20 percent of the government rebate money on the deals they've made, but they're still waiting to be reimbursed for two-and-a-half million dollars, which he admits makes him a bit anxious.

General Motors and Chrysler say they will front their dealers money until they receive their government checks. And while it's possible Congress could vote more money for Cash for Clunkers, the Obama administration says it's not seeking to extend the program.

Brian Naylor, NPR News, Washington.

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