**The US House of Representatives has approved extra funding to allow the Car Allowance Rebate System to continue.**Under the scheme, Americans who trade in their old cars for more efficient models receive cash payments.
The programme was backed by $1bn (£600m) of stimulus funds, but has proved so popular that more cash is needed to keep it going.
The House has approved an extra $2bn, and the Senate is expected to vote on the matter next week.
Seeking clarity
US car-dealers have been expressing concerns that they are receiving confusing information about the programme.
Some are unsure whether they should continue advertising the cash payments in case the government is unable to honour its promises.
White House spokesman Robert Gibbs has assured car-buyers that “if you were planning on going to buy a car this weekend using this program, this program continues to run.”
“We are hoping for some clarity from the White House and Congress”
John McEleney
Chairman, National Automobile Dealers Association
But the administration has not made a commitment to continue the scheme beyond this weekend, so Congress is working to free up $2bn in extra funds from unused stimulus projects to extend the scheme.
“We are hoping for some clarity from the White House and Congress before the day is over,” said John McEleney, chairman of the National Automobile Dealers Association.
Under the terms of the programme, which has been dubbed “Cash for Clunkers”, Americans are being offered up to $4,500 if they scrap their old cars or trucks and exchange them for new, more fuel-efficient vehicles.
Officials projected that $1bn would be enough to fund 250,000 transactions.
They planned for the scheme to operate until 1 November or until the money ran out, but sales volumes have been unexpectedly high, and the funding is drying up more quickly than had been predicted.
No precise sales figures are available but the Associated Press has quoted Michigan Senator Debbie Stabenow as saying that some 40,000 sales have been completed through the scheme, with dealers estimating that a further 200,000 deals are in the pipeline.
The scheme was designed to stimluate the US car industry, which has been hit badly by the global economic crisis.
Car sales for the first half of 2009 were down 35% from the same period in 2008, and observers are predicting only a slight recovery during the second half of the year.