Rescue from dangling cab

WASHINGTON -- The Obama administration will end the popular $3 billion Cash for Clunkers program on Monday, giving car shoppers a few more days to take advantage of big government incentives.

The Transportation Department said Thursday that the government will wind down the program at 8 p.m. Monday. Car buyers can receive rebates of $3,500 or $4,500 for trading in older vehicles for new, more fuel-efficient models.

Transportation Secretary Ray LaHood said the program has been "a lifeline to the automobile industry, jump starting a major sector of the economy and putting people back to work." He said the department was "working toward an orderly wind down of this very popular program."

The White House has touted the program's success in providing a targeted boost to the sluggish economy since its inception in late July. Through Thursday, auto dealers have made deals worth $1.9 billion and the incentives have generated more than 457,000 vehicle sales.

But the administration needed to put a halt to the program to avoid surpassing the $3 billion funding level. Consumers were on pace to exhaust the program's coffers in early September, and dealers have complained about long delays in getting reimbursed for the car incentives.

John McEleney, chairman of the National Automobile Dealers Association, said he remained concerned that so few dealers had been reimbursed for Clunker deals. But he said the Monday deadline should give dealers time to get their paperwork in order.

But Mike Mahalak, who runs a Dodge, Chrysler and Jeep dealership in Winter Haven, Fla., said the Monday end date could lead to a similar rush that nearly crippled the federal government's computer systems that were set up to handle claims.

"That Web site will lock up again once everyone is cramming it again on Monday," Mahalak said. The administration has said it expanded the capacity of the computer network in an effort to improve the process for dealers.

The Transportation Department said it has reviewed nearly 40 percent of the transactions and has already paid out $145 million to dealers.

Applications for rebates will not be accepted after the Monday deadline, administration officials said, and dealers should not make additional sales without receiving all the necessary paperwork from their customers. Dealers will be able to resubmit rejected applications after the deadline.