Did ‘cash for clunkers’ run dry or not?

Introduction

Thought “cash for clunkers” had run dry? Not quite. Despite widespread reports that the wildly popular program has burned through its $1 billion budget, nearly a quarter of the money may remain.

According to the Department of Transportation, as of today the government has received 184,000 voucher requests, which translate into $775 million in claims. A DOT spokeswoman provided the official figures but declined to comment on how many outstanding claims auto dealers may have yet to pass on to DOT for processing. The Senate was poised to vote on adding another $2 billion to the program today.

The conventional wisdom that the money was spent may have been fueled early by a “spot survey” conducted by an auto trade group. On July 31, four days after the program began, a press release from the National Automobile Dealers Association said its survey showed “the $1 billion appropriated by Congress for the program may already have been – or will soon be – spoken for.”

On Thursday, a spokesman for the association said some dealers may still be holding outstanding vouchers, though he did not know how many.

Although the numbers have been fuzzy, national media have repeatedly proclaimed that cash for clunkers had burnt through $1 billion in a week.

The confusion, according to industry experts, is rooted in a program that was quickly patched together and has been more successful than anticipated.

Kim Custer, spokesman for the Association of International Automobile Manufacturers, said it was difficult to accurately track the voucher numbers in the early days of the program, which helped cause a panic that the money would run out and consumers who expected rebates would be left empty handed.“Nobody thought the volume and the pace was going to be this intense,” Custer said. “They funded it thinking the money would last for three months.”

Marc Cannon, senior vice president at Auto Nation, a national retailer that claims to be the world’s largest family of dealers, said he also suspects dealers have a backlog of outstanding vouchers. Dealers are just now getting the hang of the process of entering the vouchers into the government computer system, he said. Although some dealers have stopped offering the rebate over fears that the money is gone, Cannon said, Auto Nation is still “going gangbusters” with the program.

UPDATE: The Senate voted Thursday to expand the program by an additional $2 billion, sending the measure to President Obama, who is expected to sign it.