Additional $2Billion Budget Approved for Cash for Clunkers

July 31, 2009

Washington– Due to the unexpected strong response and demand of American consumers for the “cash for clunkers”, the House has approved of the additional $2 billion to replenish the fund for the said program. A $1 billion budget was appropriated by the Congress to it just last month.

The “Cash for Clunkers” car purchase program or Car Allowance Rebate System is designed to help the ailing car industry and the environment by spurring car owners to trade in their old cars for more fuel efficient vehicles with federal subsidies up to $4,500.

US President Barack Obama has called the program to have succeeded beyond expectations. Aside from stimulating overall sales, the program is aimed to boost the sales of vehicles by troubled manufacturers General Motors Corp and Chrysler Group.

Analysts have said that the program is expected to give the economy a bit of a lift in the current quarter.

$3,500 to $4,500 rebates were to consumers from the $1 billion fund but in less than a week, sales and pending orders have used up nearly all the money.

Michigan Senator Debbie Stabenow said about 40,000 vehicle sales had been completed through the program but dealers estimated they were trying to complete transactions on another 200,000 vehicles.

The $2 billion additional fund approved by the Congress will come from a $6-billion Energy Department loan guarantee fund to spur innovation in renewable energy technology.

The White House press secretary Robert Gibbs has reassured the consumers that the cash for clunkers program is still ongoing.