The cash for clunkers program refers to the government's Car Allowance Rebate Scheme (CARS) program. The program entails swapping your old car with a brand new car and in the process getting a discount of a whopping $3,500 to $4,500 on the purchase of your new car.

Let us discuss some of the consequences of this program.

The automobile industry experienced a revival after the disastrous decline in the recent recession. The American car companies as well as the dealers have greatly benefited by the increase in new car sales. The cash for clunkers program has lured many customers into buying new cars by scrapping their old vehicles, who otherwise would not have done so. Indeed this program has revived the car market which was dead which is proved by the fact that Ford has declared increase in their sales for the very first time in almost two years.

The cash for clunkers program has helped Americans to recycle about 750,000 cars, representing 0.55% of the total number of registered cars in U.S.A. Cars giving an average of 15.8 miles per gallon have been removed from the roads. These have been replaced by cars which give an average of 25.4 MPG. This amounts to an overall improvement in terms of fuel efficiency by 60%.

The destruction of the trade - in vehicles has reduced the greenhouse gas emissions (GHG) by higher than two million metric tons each year which is similar to taking off the road, greater than 300,000 vehicles.

Having participated in the program, customers have been able to reduce gas costs and this has helped in increasing their savings.

The nation's reliance on imported oil has thus lessened. Accidents and injuries on the roads have also been reduced as the new cars have greater safety measures than the older ones.

The providers of auto insurance have also reaped benefits out of the cash for clunkers program. Higher car sales resulted in increased demands for auto insurance.

However all said and done certain inherent flaws in the program also need to be mentioned. The Congress had underestimated the response from consumers and the initial $1 billion funding was insufficient to take care of the enormous consumer response experienced in the initial stages. The government had to urgently allocate funds to the scheme once again immediately after the program started.

Due to inadequate time for making staff and other resources available, the transportation department officials could not handle the heavy consumer responses effectively. Those systems designed for reimbursing the dealer claims got swamped. A great deal of government regulations designed for preventing fraud resulted in increased amount of complicated paper work. Most of the dealers were not in a position to fully understand the intricacies resulting in many dealer claims being held up. Due to this program, lot of companies who specialize in restoration as well as building old vehicle parts have suffered.

However the positive effects outweigh the negative ones, and despite the premature closure of the program in late August, the cash for clunker program has been quite successful.