Automakers Should Consider Doing "Clunkers" Themselves

(MoneyWatch)  What's next for "Cash for Clunkers?"

The "Clunker" trade-in concept worked well, even if the execution was shaky.

Maybe the automakers themselves will come up with their own versions of the government-sponsored Car Allowance Rebate System.

Chrysler, Ford and General Motors have a recent history of jumping on any bandwagon, when it comes to promotions that actually work.

GM launched the "Keep America Rolling" program after the Sept. 11, 2001 terror attacks. GM's zero-percent loan program worked so well at the time, Chrysler and Ford followed suit. In 2005, GM again came up with The Next Big Thing in incentives, with "Employee Pricing for Everyone." That became a craze, too, when Chrysler and Ford jumped in.

If Cash for Clunkers is today's Next Big Thing in auto discounting, maybe GM or another competitor will decide to give it a go, even without government funding.

It might not be that expensive for the automakers in the grand scheme of things, especially if they can cut other discounts at the same time; if dealers can be persuaded to share the costs; and since not everybody is eligible.

Meanwhile, the Obama Administration decided to declare victory today and shut down "Cash for Clunkers," effective Monday, Aug. 24.

"It's been a thrill to be part of the best economic news story in America," said U.S. Transportation Secretary Ray LaHood, in a written statement today.

That's a real positive spin for a program that ran out of money almost as soon as it went into effect, and which needed additional funding. In addition, car dealers are complaining about a big backlog of "Cash for Clunker" rebates that haven't been processed yet.

In fact, the National Automobile Dealers Association lobbying group asked the Department of Transportation earlier this week to shut the program. NADA was worried that dealers could be left holding the bag for "Clunker" rebates that don't get funded by the government.

If "Cash for Clunkers" gave LaHood a thrill, it was probably more of a thrill than he intended.

Photo: NADA.org