5:32pm Pacific - From the National Automobile Dealers Association:
Car shoppers and dealers across the country breathed a sigh of relief today when the Senate approved a House measure adding $2 billion to the wildly successful "cash for clunkers" initiative. The additional funds will allow dealers to continue offering consumers up to a $4,500 incentive to trade-in an older gas-guzzler for a new, more fuel-efficient car or truck.
Late last week, the National Automobile Dealers Association (NADA) advised the U.S. Department of Transportation (DOT) that the program's funding was running dangerously low because of glitches in the government computer program which caused an overwhelming backlog of transactions.
"Cash for clunkers is a resounding success," said John McEleney, NADA chairman and a multi-franchise dealer in Iowa. "With the additional $2 billion, even more clunkers will be taken off the road and replaced with more fuel-efficient vehicles. Extending the 'clunkers' program benefits the environment and the economy. It's the best kind of stimulus."
A NADA survey also revealed an environmental benefit: consumers were purchasing or leasing vehicles eligible for the higher $4,500 credit (a 10 mpg improvement over the trade-in) by a two-to-one margin over the $3,500 credit (a four mpg increase over the trade-in).
Also, the additional $2 billion funding for the "clunkers" program substantially reduces the risk that dealers will not be reimbursed for deals already completed.
(Hear Bailey Wood of NADA on my radio show Saturday, 5pm Pacific time, www.TalkRadioOne.com -- and be sure to call-in with your questions and comments, yea or nay!).