U.S. to end "clunker" rebates on August 24

DETROIT/WASHINGTON (Reuters) – The U.S. government said it will suspend its popular “Cash for Clunkers” auto rebates on Monday as the program’s $3 billion budget runs dry, a month after it was launched.

The program, offering payments of up to $4,500 to people who trade in old gas guzzlers for new, fuel-efficient vehicles, will end at 8 p.m., August 24, by which time all applications for the rebates must be submitted to Washington.

It has provided a big temporary boost for both the deeply troubled auto industry and the battered U.S. economy. In the past few weeks both Ford Motor Co and General Motors Co have increased production, as some models have been in short supply.

However, the temporary nature of the program is likely to raise concerns that it may have only brought sales forward from future months, and sales could plunge again.

Reuters