LaHood: 'Clunkers' May Hit Scrap Heap This Week

Aug. 2, 2009— -- Without additional funding from Congress, the popular Cash for Clunkers program could perish this week, Secretary of Transportation Ray LaHood said on C-SPAN Sunday.

"If the Senate does not pass the additional $2 billion then the program will be suspended," he said, referring to the cash infusion passed quickly by the House on Friday to keep the cash-strapped program afloat.

He said that anything already in the pipeline would be paid, adding that "there will be a good faith effort" to reimburse dealers for cars sold Monday.

Lahood also expressed confidence that the Senate would pass the funding needed to keep the car incentive plan going.

"We will continue the program until we see what the Senate does," he said. "I have great faith that the Senate will pass this."

This weekend, the program's financial limbo spilled into showrooms across the country, as potential car buyers wondered if they were eligible for the program and if the program still existed at all.

Car dealerships coast to coast braced for crowds, but instead they were hammered with questions.

"We got a lot of phone calls about 'are we on, are we off, you guys still doing the program?'" said Alex Valencia, a car salesman with a Nissan dealership in Fairfax, Va.

The program offers owners rebates of up to $4,500 if they trade in their gas-guzzling cars for a new car. The program has been so successful that the $1 billion allocated by Congress last month ran out within a week, as auto dealers began filing for reimbursement.

Although the House of Representatives quickly passed legislation Friday, July 31, 2009, to add $2 billion in funding to the cash-strapped program, the Senate has yet to approve the bill.

The White House has assured dealers that they will be reimbursed for any deals closed over the weekend, but, in the meantime, car dealerships that continue to offer the government's incentive are doing it on faith.

As for the customers, some are finding the program requirements difficult to decode.

Robert and Rebekah Jarman of Lynchburg, Va., drove three and a half hours to a Nissan dealership in Fairfax, Va., to trade in their 1999 Buick Regal for a new fuel-efficient car. But when they arrived at the showroom, they found out their car was not eligible.

"We had thought it qualified based on the qualifications on the Web site, but come to find out we just missed the mark just by a couple miles," said Robert Jarman.

Still, the program is working for many Americans. Officials estimate that more than 250,000 cars have been sold as a result.