WASHINGTON -- The Obama administration plans to cut off dealer funding for the cash-for-clunkers program on Monday at 8 p.m. EDT, after finding that the $3 billion fund is nearing depletion, Transportation Secretary Ray LaHood said.
The overriding objective was to be conservative and to provide an adequate window for a soft landing, a senior administration official said in a conference call with reporters today.
Neither official said how much money remains in the program, though a person knowledgeable about its funding said the amount is in the hundreds of millions of dollars.
LaHood expressed confidence that there would be enough to assure payments for all dealer applications submitted through Mondays expiration, even if there is a last-minute consumer rush.
We expect there will be a flurry of activity over the weekend as the program comes to a close, said Jeremy Anwyl, CEO of the Edmunds.com consumer Web site.
Though the government will not accept rebate applications after 8 p.m. Monday, dealers will still be able to resubmit rejected applications after the deadline, LaHood said.
The Transportation Department said today that dealers had submitted 457,476 transactions for $1.91 billion in rebates for voucher payments made to customers.
Of this amount, the government has approved $140 million in payments to dealers, the agency said in its first disclosure of rebate figures.
That means that about 7.3 percent of reimbursement claims have been paid to dealers.
Decisive action must be taken in order to ensure that dealers are fairly reimbursed for sales they have made using program vouchers, said Rep. John Dingell, D-Mich.
Asked how long it would take to pay dealers, the administration official said it depends on the extent to which dealers submit valid applications and how quickly the government can process them.
The governments expected depletion of about $3 billion in just four weeks, from July 27 to Aug. 24, dramatizes the unexpected popularity of the program.
It has been successful beyond anybodys imagination, President Barack Obama said in a radio interview today.
When the president signed the legislation in June, the measure provided for just $1 billion with the expectation that it would last until Nov. 1.
Obama signed an additional $2 billion in funding early this month. At that time, LaHood predicted the money would last through Labor Day.
With an average fuel economy increase of almost 10 mpg, the program has achieved its goals of stimulating the economy, enhancing energy security and reducing greenhouse gas emissions, said Dave McCurdy, CEO of the Alliance of Automobile Manufacturers, in a statement.
Advice to dealers
Administration officials today offered advice to dealers for the days ahead.
The Department of Transportation urges dealers to focus today on getting pending deals completed and submitted, the agency said in a statement. Dealers should not make further sales without receiving all the necessary paperwork from their customers.
It also advised dealers to submit complete applications, which will expedite payment.
The official, who declined to be identified, said there had been a number of cases in which dealers hadn't properly documented that customers had 12 months of continuous insurance on the trade-in . Dealers also had often failed to show that they were junking the title of the trade-in to prevent fraud, the official said.
By the end of this week, Transportation expects to triple to 1,100 the number of private and public employees processing dealer claims.
Dealer applications increased at a rate of $75 million a day between Aug. 5 and Aug. 18, federal data show.
That would suggest that about $375 million in additional claims will be filed by the close of the program without an unusual spike in activity, which would bring total dealer applications to about $2.3 billion.
That figure does not include the backlog of transactions that remain unclaimed by dealers.
An informal National Automobile Dealers Association survey found that this backlog is relatively small, Chairman John McEleney said.
The administration official declined to say whether the government would seek additional funding once Congress returns from recess after Labor Day.
He also wouldnt say what the administration would do if theres money left over.
Many dealers have complained that theyre not getting paid on claims filed as far back as July 27, when the program kicked off in earnest.
Obama said today that there have not been extraordinary delays in the processing of the claims and that the government has to be scrupulous in reviewing them to avoid fraud.
Said Obama: This is actually a high-class problem to have -- that were selling too many cars too quickly, and theres some backlog in the application process.
Chrissie Thompson contributed to this report.