Cash for Clunkers could be done as early as tomorrow

The government will announce a plan as soon as tomorrow for winding down its popular but problem-plagued "cash for clunkers" program.

The announcement by Transportation Secretary Ray LaHood came as a New York dealership group said that hundreds of its members had stopped doing clunker transactions because of delays in getting reimbursed by the federal government.

Dealers worry that the $3-billion program will run out of money before they are reimbursed for discounts given to car buyers on clunker transactions. The National Automobile Dealers Assn. said "it is difficult, if not impossible, to accurately project the 'burn rate' of available funds" for the promotion, which provides discounts of $3,500 or $4,500 to consumers who trade in an older car for a more fuel-efficient new car.

That could leave dealers holding the bag, the group said, because the rules stipulate that the government doesn't have to pay dealers who submit claims for reimbursement after the program runs out of money.


'Cash for clunkers' won't be running much longer, government says