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Cash for Clunkers nearly in gear

The House passes a $2 billion extension as the surprise popularity of the car buying incentive program has it close to running through its $1 billion budget.

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By Gerri Willis, CNN personal finance editor

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NEW YORK (CNNMoney.com) -- Cash for Clunkers, the federal program that allows you to trade in your gas guzzler, smacked into a roadblock this week after it became clear the program is already close to burning through its $1 billion budget. The White House made clear today that the program will extend at least through the weekend if not longer. The House just passed a $2 billion extension to the program but the Senate is not expected to vote on the measure until Monday.

Let's take a look at the math.

According to the latest figures from the National Highway Traffic Safety Administration, about $146 million has approved to be given out already. And according to the National Automobile Dealership Association, about $1.2 billion is projected to be given out. Keep in mind that the program was allocated $1 billion from the beginning.

Demand is simply overwhelming -- 23,000 dealerships have signed onto the program. Experts say that dealerships had started declining people for the program earlier this week.

The program was supposed to officially end on November 1st. The speed at which this program was put on hold was pretty surprising to experts who estimated the program would run out of money by mid to late August.

If you want to trade in your clunker, make sure you don't sign a waiver that forces YOU to pay the voucher if your deal doesn't go through. And, have the dealership wait to destroy your old car until they are absolutely sure that you are getting the voucher money.

Of course you shouldn't forget to negotiate the deal -- yes you are getting help from the federal government to buy the car but that doesn't mean you shouldn't get the best possible price. Check out Web sites like edmunds.com and consumerreports.org for strategies on negotiating.

Remember, act quickly -- one expert we talked to at Consumer Reports says that it's entirely possible that Congress may tighten the requirements on mileage in the future to get better results out of the program.

In the meantime, any purchase this weekend will honored according to the White House -- so if you are in the market to get rid of your clunker you will probably want to act quickly -- and it is likely that Congress will extend that program beyond this weekend.

Got a financial dilemma? Go to CNNMoney.com/helpdesk to submit questions, read the Help Desk articles and check out new Help Desk videos. And tune in to CNN's Newsroom Tuesdays and Fridays, when Gerri Willis and other experts answer your questions. To top of page

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