Cash for Clunkers Ending Monday

The CARS program will end Monday, U.S. Transportation Secretary Ray LaHood said, and paperwork from dealers must be submitted by 8 p.m. EDT.
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WASHINGTON (

TheStreet

) -- The Cash for Clunkers program will wind to a close on Aug. 24 amid dealer anger over slow repayments.

In a press release issued late Thursday, U.S. Transportation Secretary Ray LaHood said the cash for clunkers program will come to a close on Monday at 8 p.m. EDT.

"This program has been a lifeline to the automobile industry, jump starting a major sector of the economy and putting people back to work," LaHood said in the release. "At the same time, we've been able to take old, polluting cars off the road and help consumers purchase fuel efficient vehicles."

The Cash for Clunkers program has provided rebates of up to $4,500 when people turned in their older automobiles for fuel-efficient vehicles. Most consumers have turned in trucks and SUV's in exchange for passenger cars, with an improved gas mileage of about 60%, the Transportation Department said.

The popular CARS program has recorded more than 457,000 dealer transactions worth $1.9 billion in rebates, the Department of Transportation said Thursday.

LaHood said the late Monday deadline will allow car dealers and buyers plenty of time to finalize purchases and submit applications for rebate from the remainder of the $3 billion provided by Congress.

Based on conservative estimates of valid transactions so far, the Transportation Department has projected that there is enough money to continue accepting submissions until the Monday deadline.

Applications for rebates will not be accepted after 8 p.m. EDT Monday and dealers were told not make further sales without receiving all the necessary paperwork from buyers. The Transportation Department did say dealers will still be able to resubmit rejected applications after the deadline.

On Wednesday,

Transportation Department

officials met with car dealer trade groups on Wednesday to discuss how the program will eventually end and respond to complaints over a backlog of rebate payments to dealers.

General Motors

announced Tuesday that it was boosting its production for the rest of the year to keep up with the increased Cash for Clunkers demand -- adding 60,000 vehicles to its production and incrasing its workforce by 1,350 workers.

Last week,

Ford

(F) - Get Report

moved to do the same boosting its overall production by 2% for the third quarter.