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$2B more for 'cash for clunkers'

July 31, 2009 12:00:00 AM PDT
Reports of its demise greatly exaggerated, the popular 'cash for clunkers' is alive and well, assuming the Senate votes to pass it, and just in time for weekend car buyers. The program offering cash credit for gas guzzlers has been so popular, it has threatened to run out of funds.Just like dealerships across the U.S., the 'cash for clunkers' program continues at North Hollywood Toyota.

There was some confusion on Thursday because some dealerships stopped honoring the program, although the government never officially suspended it. But thanks to assurances from President Barack Obama and moves in Washington, dealerships are seeing the return to the "good old days."

The salesmen at North Hollywood Toyota are expecting to pull another all-nighter.

"It's brought a lot of business to the store, and we're looking forward to hopefully seeing another extension on this," said Noel Graham from North Hollywood Toyota.

The House voted overwhelmingly Friday to rush an additional $2 billion into the popular but financially strapped "Cash for clunkers" program.

The program was supposed to be suspended overnight because it was in danger of running out of money. However, House members acted fast and approved the measure 316-109 in order to give consumers more time to take advantage of trade-in rebates for older cars.

Obama praised the swift action from the House. A vote in the Senate could take place next week.

Car sales have been very busy this week across the country. The "cash for clunkers" program allows people to bring in their gas guzzlers and get up to $4,500 toward the purchase of a new, more fuel-efficient vehicle. The program was set to expire November 1 or when the $1 billion in government funds run out.

Word of the possible suspension of the program put a scare into everyone.

"I was in here the other day and I should have bought it then. And then when they said that the program was suspended, I'm thnking 'Oh boy, you know, I better get in there and see if I can get a car,'" said Phil Thomas, who's trading in his '88 Dodge van for a new Dodge Patriot.

Many dealerships made last-minute sales all the way up until midnight. With more customers ready to buy, dealer managers are hoping to get clear word from the government about the future of the program.

"Yesterday it was a little bit of a different story because people were, 'What's happening? We hear it's stopping,'" said Eric VanAce, general manager of David Ellis Chrysler Jeep. "It's a little bit up and down. So we're very excited about the program. It's a great way for people to get more fuel-efficient vehicles."

The government hoped "cash for clunkers" would boost auto sales, and it appears to have been successful. More than 22,000 cars nationwide have been purchased through the program.

Auto dealers say the program has been great for business. Galpin Ford in Van Nuys has sold about 150 vehicles through the program in the last week.

"Thursday night we were here until about 3 in the morning, we did over 30 deals alone with 'cash for clunkers,'" said Brian Allen, manager of Galpin Ford. "It looks like we have an extension through the weekend so we're calling all our customers we've been working with, saying we need to do this now while we know we have the money for it."

The first week was so successful that some dealers were worried the program would run out of money before they could be reimbursed.

"We've had more business this week than we've ever had," said Michael O'Connor from Cerritos Subaru. "There's a lot of money at stake, right, 4500 dollars, a car extra that if we don't get paid from the government the dealership would have, you know, to eat it."

Auto dealers are expected to have a very busy weekend.

The government assures everyone that all transactions made through Sunday will be honored through the program, and with lawmakers adding another $2 billion, it looks like it may continue even further.

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