While Truth About CASH FOR CLUNKERS Funds Remains Unclear More Money is Approved

AUTO CENTRAL - July 31, 2009: Late yesterday the Associated Press published a report stating that the CARS "Cash for Clunkers" program was being suspended because funds had run out (just days after the program commenced). AP cited an anonymous source. This source has still not been revealed. The story was published even though the NHTSA and the official Cash for Clunkers' website told a completely different story: That there was plenty of money still available.

The AP report that funds were exhausted, which then triggered an avalanche of similar stories, has still not been confirmed. In a phone conversation this morning between The Auto Channel and the NHTSA, our source said that the program was still very much in operation and that they didn't know what AP and Reuters, et al, were talking about. Although, our source admitted, they didn't have an exact picture of how much money was still available because the figures are dynamically changing.

In any event, the "bogus" AP story sent shock waves through Washington this morning, which prompted Congress and President Obama to take immediate action. The House has already passed a bill for the extension of the program, on a vote of 316-109, to the tune of an additional $2 billion (twice the amount originally allocated). The Senate should be passing the same bill soon and the President has already said he will sign it.

In the days to come, it'll be interesting to learn what the real state of the program was on the night of July 30th. In any event, one thing is clear, the Cash for Clunkers program has provided a much needed lift to the automotive industry. For the first time, in a long time, people are talking cars again and going to local dealerships to kick some tires.