Drivers Cash in Clunkers as Deadline Nears

When Lee and Pam Vargo heard the cash for clunkers program was about to hit a dead end, they knew they had to make a deal. Like many American motorists, they're trading in their pickup for a smaller SUV.

"There's business and customers," Brian Benstock of Paragon Honda in Los Angeles told CBS News Correspondent Ben Tracy for "The Early Show Saturday Edition." "More and more business is dead on the side of the road. It needed a jump start."

Nationwide, 489,000 clunkers have been traded in for $2 billion in rebates. Yet for some dealers, the program has been a real lemon. They have to front the money for the rebates and government has been slow to pay them back. The government owes one L.A. dealership nearly $800,000. In fact, of the $2 billion in rebates dealers have paid out, the government has paid back at least $145 million.

"They're going to get their money," Transportation Secretary Ray LaHood said this week. "We have the money. Congress provided the money."

Major auto manufacturers are now loaning dealers money for the rebates. But those who took the clunkers say the government owes them their cash.

"I hope that the government has enough money to pay us," said Don Rohde of Galpin Ford in Los Angeles.

The government insists there is enough to pay for deals made before Monday's deadline of 8 p.m. Eastern.

Jon Linkov, managing editor for automobiles at Consumer Reports, told CBS "Early Show Saturday" Co-Anchor Erica Hill that the program was a success for consumers who took advantage of it.

"For dealers, it is going to be a little bit of a float," Linkov said. "For the country, yeah, we have people working, people getting commissions, but now we have a tipping point where sales might peter out."

Linkov said the program wouldn't appeal to people who want all of their money to go back to American car companies, but the program benefits American drivers.

"Consumer Reports says these vehicles are all reliable," Linkov said. "All of them are reliable vehicles. They get good fuel economy. It has been a success in that respect, getting old vehicles and unsafe vehicles out of the hands of inexperienced drivers potentially."

After Monday, Linkov definitely expects to see a dropoff in car sales.

"We're probably seeing people holding off in May and June from buying because we heard cash for clunkers, so they waited and rushed into dealerships" Linkov said. "That's also pulling in people from October, November, December, January, February of next year who ran in to get the money too. We'll see a dropoff."
By CBS News Correspondent Ben Tracy and Co-Anchor Erica Hill