"Cash for Clunkers" Program to Be Wind Down

Since Cash for Clunkers started in late July, Monument Chevrolet has sold 42 vehicles to people who took advantage of the incentive program, the Pasadena dealership's owner Carroll Smith said.

Photo: "Cash for Clunkers" Program to Be Wind Down

Under the program, a dealership takes up to $4,500 off the price of a new vehicle, and the federal government reimburses it for that amount.

There is just one problem for Smith. He hasn't yet been paid by the federal government for any of those transactions.

The Cash for Clunkers incentive program has sent consumers flocking to showrooms and buying cars, providing a much-needed boost for dealers. But the government's pace in paying back dealers has them under financial strain, Smith and other dealers say , Houston Chronicle reports.

Meanwhile, the Obama administration will release a plan this week to wind down its "cash for clunkers" incentive program, signaling that one of Washington's fastest-acting stimulus programs is nearing an end.

Transportation Secretary Ray LaHood said Wednesday he would disclose within two days updated figures on the program, including how much of the $3 billion in funding was left. He said he would also offer a blueprint for how the administration will wind down the program to ensure all vouchers issued by dealers are reimbursed by the government before the money runs out , Wall Street Journal reports.

"Let's say we've given the customer a $4,500 voucher," Bee said, "we've given that money in good faith. But if the clunker isn't approved, we'll have to eat that $4,500." , Washington Post reports.