RICHMOND, VA (WWBT) - The Cash for Clunkers has been so popular -- the $1 billion the government pumped into it is already running out.
When this program was first announced, government officials said it would run through November, or until the money ran out. Here we are just one week after the program launched, and some think that's already happened.
According to sources on Capitol Hill, transportation secretary Ray Lahood notified key senators late last night that the rebates would be suspended amid concerns it could quickly use up a billion dollars in federal funds set-aside for new car shoppers.
Wildly popular, the program gave consumers up to $4,500 if they traded in a gas guzzler for a more fuel efficient new vehicle.
The program has helped to rev-up the sputtering auto industry. Since kicking off last Friday, sales have skyrocketed, mostly from people who weren't even looking to buy a car right now.
"Since Friday, we've increased our business probably by about 30 percent," said Tom Willard of Bob Smith Toyota.
"In almost every case, this was somebody who was not in the market," said Steve Hinchcliff of H & H Chevrolet.
In less than a week more than 22,000 people took advantage of the incentive plan, spending nearly $96 million, but a huge backlog in processing thousands of deals raised concerns that auto dealers may have already passed the $250,000 vehicle limit funded by the program. That's why the government decided to go ahead and act.
A White House official says the program is being assessed, and good news -- any transactions already made between dealers and consumers will be honored.