The Cash for Clunkers program appears to be coming to an end, as the government has decided that there is no longer any room in the budget for it to continue. This program was designed so that more Americans could afford new vehicles, which would help out the struggling auto industry. The only catch was that the vehicle that was purchased had to have an average fuel economy rating equaling 18 miles per gallon or better. Basically, the program called for people to trade in their older vehicles and they would receive between $3,500 and $4,500 for them.

The Cash for Clunkers program was originally slated to have a $1 billion budget, but it went through all of this money within the first week. Because of this, it was decided that an additional $2 billion should be allocated for Cash for Clunkers, since it was helping out the economy so much. The influx of sales allowed for certain manufacturers to reopen plants that had been closed due to the recession, which brought more jobs to the country as well. The increase in vehicles sold has also been good for car insurance companies, as they are now able to insure newer vehicles, which will bring higher insurance rates than older, run down vehicles.

Aside from the $3 billion budget being close to expended, the Cash for Clunkers program had to end because dealerships were actually getting low on funds. The problem with the program was that dealerships had to give the rebate upfront and then wait for the government to reimburse them. This reimbursement process took a very long time in some cases and, in fact, many dealerships still have not received any of this money back. This places them in an extremely difficult situation, as they want to make as many sales as possible, but they do not want to be responsible for providing these discounts to the public out of their own pockets.

Overall, Cash for Clunkers was a success, as it helped out the American economy substantially. With that being said, it has seemingly run its course and needs to come to an end. One thing that will continue to help the economy after all of this, however, is that all of these new vehicles will now need car insurance, so multiple industries will reap the benefits. This will also leave countless people looking for low car insurance rates, which is great for consumers because it will force car insurance companies to compete with one another.