Monday marked the final day of the U.S. government's Car Allowance Rebate System also know as Cash for Clunkers, a term for old cars that consume too much gasoline. The aim of the program is to stimulate the auto industry by offering rebates to owners who trade in their old cars for new ones. Consumers flocked to car dealerships across the country to trade in their vehicles for discounted, more fuel efficient models.
It was the end for countless cars that sucked up too much gasoline, and the beginning of what many Americans hope is a brighter future for the auto industry.
"I love it. We got all our guys back to work right now and we're stayin' busy," says one auto worker.
More than 1,000 laid-off workers from General Motors were called back to the assembly line as consumers flocked to showrooms to take advantage of the Cash for Clunkers program.
Arthur Hoiland bought a car but said he would have kept his old car if the program did not exist. "I'd probably drive it til it's dead," he said.
Supply barely kept up with demand - leaving empty lots at many dealerships.
"It's been a historic month in all proportions," says Scott Addison of Maryland. He manages Fitzgerald Auto Malls, a company with 36 dealerships. "They were coming in hoards making sure they got the car they wanted, their car qualified, and they got their $3500 or $4500 rebate," he explains.
Car buyers may be getting a vehicle at a discounted price but dealers have to make up the difference by paying up to $4,500 for each car and waiting for the government to reimburse them.
"We've got about 20 percent of our money back so far," Addison says. It may be an inconvenience for some of the larger car lots, but smaller dealerships could be in some serious financial trouble if the government doesn't pay them soon. "Some dealers, you know, if they don't get paid in a hurry they're actually going to be in a situation where perhaps they've sold themselves into bankruptcy," he said.
Congress has put $3 billion into the Cash for Clunkers program. The U.S. Department of Transportation assures dealers they will get paid.
Some car dealers are hopeful the Cash for Clunkers program will lead to long term growth.
"And now that people are buying cars and showing up, hopefully when you look down the street and you see the Jones' with a new car that will excite you to go out and get you a new car," Addison imagines.
But Wall Street trader Jason Weisberg says it may be too early to tell whether the economic benefits will last for auto makers like GM. "The market would indicate they are off death's doorstep at the moment, but the jury is still out whether they can make it in a competitive market," he said.
Many auto dealers say they will call the program a success if they get a check from the government soon and move all these "clunkers" off to the scrap yard.
