The Senate voted on and approved $2 billion in additional funds for the CARS, Cash for Clunkers program. The vote passed with those in favor numbering 60 and those against coming in at 37.
The bill has also been signed into law by President Obama. The additional funds could not come quickly enough as the initial $1 billion in funding approvedin June for the clunkers programs only lasted a few days and generated around 220,000 auto sales.
The additional funding means the program will be on until September 1. This is good news for clunker owners and even better news for dealerships who have sold cars in record numbers for the year since the program kicked off. July auto sales were higher than any other month this year and many dealerships have empties their lots through the program.
Some Republicans fought for amendments to the program, but in the end, the support for the program was simply too strong to be overcome. Republicans against the program stated that it has squeezed months of normal activity into a short time frame and when the backlog is met, interest will be lost and the car sales will drop back to or below previous levels.
However, automakers disagree stating that the program has created a much needed boost to sales right now when they need it most. They believe that the program has kept suppliers, scrapers, steel producers and small businesses up and running during these tough economic times.
With the program's success, we wonder if they we keep extending it through additional funding. It has dramatically impacted auto sales in a positive way and has even led Goldman Sachs to raise their GDP for the U.S. this year. Quite stunning what a little money can do to the economy and an industry.
Source: Reuters
