Cash for Clunkers is the Ultimate Lemon

The heat and humidity of the summer just got a little hotter on Capitol Hill. The Car Allowance Rebate System (CARS) or commonly known as "Cash for Clunkers" just announced the end of its program at 8pm on Monday, August 24, ( less than 2 months after it's starting date and 3 months before its scheduled ending date) The program offered a $4,500 economic incentive to purchase these new cars. "Cash for Clunkers" had run for only a few weeks before exhausting its original $1 billion dollar allotment from the government. Congress then had to approve an extra $2 billion dollars on July.31, just days before their August recess. This rebate program allowed prospective car buyers to trade in their old cars in order to purchase a newer and more fuel efficient style which would help save gas as well as cutting down on carbon usage, therefore saving the environment in the process. A month and $3 billion dollars later this program is a clunker. It shows how inefficient and unproductive the government is when trying to run simple programs. President Obama has repeatedly said "it's simply a product of its success", yet the government has done nothing to improve the efficiency of processing the complicated paperwork the dealers need to fill-out in order to receive the money from the government. So dealerships nationwide are now holding their breath hoping that the government can process their paperwork fast enough for them to meet payroll, pay the bills, etc…

This has caused car dealers all over the country to begin pulling out of the program in fear that they wouldn't be reimbursed for the $4,500 rebate the government offered. The Government website and server continually crashed not giving dealer's, making the work complicated and tedious because the paperwork now had to be done by hand. It also required that the trade-in cars and their engines (the most valuable part) had to be made unusable and scrapped. Because of this, many towing and salvage companies have had little incentive to pick-up the destroyed cars because they make much of their money by selling used engine parts, which now don't work.

This will also have a direct consequence on used car dealerships that rely on these older cars as the backbone of their business. Used car dealers also provide an opportunity for many lower income citizens and struggling families to buy a car that they can afford. The program will also put fewer spare parts on the market for people who cannot afford new cars but have an unforeseen accident or break-down and now need a spare part to fix their car.

Then it was reported on August.14^th that many car dealerships were putting in clauses that require the purchaser to repay the full amount if the government doesn't pay the rebate that the customer was originally given. This could leave many customers in a serious financial hole if the rebate ends up not coming through.

So as the government spent $3 billion dollars to give incentives for customers to buy new cars to revamp the economy; they may possible end up screwing over dealers, customers, salvage companies, and used car dealerships all within a month. Now, we just need them to get a hold of healthcare.