Experts speculate that the number of Cash for Clunkers deals submitted will far exceed the $3 billion budget. How will Obama handle the gap in budget?
Online PR News – 22-August-2009 – – Cash for Clunkers will come to a close on Monday August 24th at 8:00 pm and it will be a four day marathon race for dealers across the country to squeeze in as many clunker deals as possible before the program shuts down.
Since the NHTSA does not control how many rebates are issued by car dealers during the program the likelihood is that the Cash for Clunkers $3 billion budget won’t be enough to fulfill the record numbers of transactions that will take place in the last four days of the program.
Brian Pasch, CEO of the Pasch Consulting Group which offers automotive marketing services to the automotive industry has been following and analyzing the bill since before it was approved by congress. Their company also created the popular consumer forum www.cashforclunkersfacts.com .
Commenting on the final days of the program Pasch voiced his concern “It is clear to me that the number of sales accelerated in the next four days will easily push the total CARS rebates past the $3 billion in funding. The question that comes to mind is: How are those transactions going to be funded?”
According to Pasch, the situation will be especially tricky since the NHTSA has no authority to spend past the $3 billion allocated by Congress. Even further complicating the situation is the fact that the CARS program was implemented without real-time tracking to understand how many rebates have already been promised to American car buyers.
Pasch added, “The large backlog of deals to be submitted still exists and the payments backlog will be further extended by the weekend sales rush. By next week, the NHTSA's 1,000 employees will have over 700,000 Cash for Clunkers sales to process and that workload will not be completed any time soon.”
Congress will not know for weeks just how far past the $3 billion the CARS program is in the red. In fact, Pasch predicts that it will take three or four weeks for dealers to get all their sales into the NHTSA reimbursement system.
In late September Pasch predicts that a wave of criticism will surface which will be targeted at the NHTSA and their implementation of the CARS program because of the financial havoc it has dealt to consumers and car dealers alike.
NHTSA Secretary Raymond LaHood has assured dealers that they will get paid, but the question may become, how???