'Clunkers' to close Aug. 24 after fueling sales

The U.S. "cash for clunkers" trade-in program will stop accepting applications on Aug. 24, bringing to a close an effort that helped revive auto sales and drew the ire of dealers for slow repayments.

The clunkers plan, which offers auto buyers discounts of as much as $4,500 to trade in older cars and trucks for new, more fuel-efficient vehicles, has recorded more than 457,000 dealer transactions worth $1.9 billion in rebates, the Transportation Department said in a statement yesterday.

The deadline will give car dealers and buyers time to complete purchases and apply for rebates from the remainder of the $3 billion provided by Congress, the department said. Dealers have complained of difficulty running their businesses while awaiting program payments, and the agency said it's adding workers to help process claims faster.

"Obviously there was a lot more latent demand than many thought," said Michael Robinet, an analyst at CSM Worldwide Inc. in Northville, Michigan. "That bodes well for the market. But we are past the honeymoon now and we have to see what the market looks like in the post-clunker environment."

Applications for rebates won't be accepted after 8 p.m. New York time on Aug. 24, the agency said.

The Transportation Department said it has handled 167,000, or 37 percent, of the 457,476 dealer requests submitted. The agency didn't say how many of the processed transactions have been paid out and how many were rejected or sent back for further information.

Some $145 million, or less than 8 percent, has been paid out so far to dealers, a senior administration official said on a call with reporters yesterday.