Funds For The Cars Program Are Running Dry
With the increasing sales slump being encountered by many of the reputed car companies, the Obama Govt. has set into motion a scheme/program known as CARS or Car Allowance rebate System.
This system has being incorporated so as to help the auto giants capitalize and make some money after the recession period. This program has offers targeted at those who would like to trade in their older vehicles for a newer car/truck model satisfying their needs. The details for this program were laid out by the NHTSA and it seems that many people are making most of this as an overwhelming 22,000 odd vehicles have been purchased through this scheme.
This program was passed by the senate and offers the owners of old cars a $3,500 to $4,500 credit facility in order to scrap their old vehicles and purchase newer fuel efficient vehicles.
The program was launched so as to help boost the cars sales and also side by side remove inefficient cars models from the streets of US. Tough this program was stated to last through till the month of November, it doesn't seem so as the initial investment made in this scheme has run out or is getting depleted very fast.
With almost about 23000 dealers making use of this scheme, dealers have surpassed the 250,000 car limit sale limit which was funded with through the initial $1 million investment.
Though the scheme has seen a lot of response from the common folks who are interested in trading in their gas guzzlers for a more fuel efficient vehicle, store dealers are worried about the number of pending deals which amount to about 25,000 in number or about 13 deals per registered store.
A spokesman for the car dealers association said that there is a tremendous blockade of funds to keep this running till the month of November and unless there is a another influx of funds it would have to be scrapped keeping many people hanging over a cliff attached by a very thin piece of thread.
As the lack of funds is in very close proximity dealers are not sure whether the government will pay for the deals that have been chalked out by them. They feel that they will be getting the worst in at least 3-4 deals due to the slow processing of documents and quotations by the government system.
Though the clunker sale program was initiated to help recover the slump encountered due to the recession woes, leading finance analysts claim that there will only be a modest revival in the sales during the second half of the year. As the current scheme has catered to the sale of about 16 million vehicles, lawmakers are trying to find a source for additional funding of this scheme so as to enable these dealers to reach their target. According to sources the extended budget for this scheme is likely to touch about $4 million.
Lawmakers are currently debating whether to make use of the unspent stimulus dollars so as to revive this scheme which is in danger of passing away if funds are not available in time.