The Transportation Department said Thursday the government will wind down the program on Monday at 8 p.m. EDT. Car buyers can receive rebates of $3,500 or $4,500 for trading in older vehicles for new, more fuel-efficient models.
Through Thursday, auto dealers have made deals worth $1.9 billion and are on pace to exhaust the program's $3 billion in early September.
Administration officials said applications for rebates will not be accepted after 8 p.m. EDT Monday and dealers should not make additional sales without receiving all the necessary paperwork from their customers. Dealers will be able to resubmit rejected applications after the deadline.
President Barack Obama said in an interview Thursday that the program has been "successful beyond anybody's imagination" but dealers were overwhelmed by the response of consumers.
Dealers have complained of delays in getting reimbursed and backlogs of vehicle paperwork getting processed in the program. Dealers have said they face a risk of not being reimbursed
but LaHood has pledged that dealers will get paid for the incentives.
I wonder if they will get paid before their car lots look like the below picture!
The administration has said it has tripled the number of staffers sorting through the dealer paperwork.
Meanwhile, hundreds of local car dealerships are pulling out of the program because of the many delays of getting paid back from the government.
The greater NY automobile dealers association says the dealers cannot afford to offer more rebates while waiting for reimbursement.
Most dealers are worried they won't get paid at all.
"The Federal Government hasn't even told them whether their transaction they just sold is going to be "paid or funded" at all.
Dealers pay the rebates out of pocket, then must wait to be reimbursed by the government. But administrative snags and heavy paperwork have created a backlog of unpaid claims.
Many dealers have waited so long to get reimbursed they don't have the cash to fund any more rebates.
"The program is a great program in the sense that it's creating a lot of floor traffic that a lot of dealers haven't seen in a long time," he said.
"But it's in the hands of this enormous bureaucracy and regulatory agency," he added.
"If they don't get out of their own way, this program is going to be a huge failure."
Obama says he's adding three times the staff to process the claims. Either they planned for failure or don't know how to plan at all.
A lot of claims are being rejected for information that is wrong or missing.
Typical government program make it so difficult that people cant even fill out the paper work properly to get paid.