The US government's 'cash-for-clunkers' programme to boost car sales roared toward the finish line today, spurring more than $2 billion in sales and concern about government spending.
The programme is expiring less than a month after its launch, a victim of its own popularity, the Department of Transportation announced last Thursday.
President Barack Obama's administration pulled the plug on the programme to prevent car dealers and shoppers from claiming more than the $3 billion Congress approved for the hugely successful programme. It gives car owners up to $4,500 to trade in a gas-guzzler for a new fuel-efficient vehicle.
When Transportation Secretary Ray LaHood kicked off the Car Allowance Rebate System (CARS) on July 27, the programme was expected to generate 250,000 vehicle sales by November 1, 'or until the money runs out.'
As of this morning, the programme had generated 625,000 applications for vouchers totaling $2.58 billion, a Department of Transportation official said.
The programme, begun with $1 billion that was quickly snapped up by car-hungry consumers, was extended less than two weeks later with an additional $2 billion allocated by Congress.
The plan is modelled on programmes in France, Germany, Italy and Spain, which have had success, although some US critics argue it adds to government debt and merely speed up sales that would have occurred anyway.
Carmakers have ramped up production, boosting jobs and income and spending flowing in the economy.
