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'Cash for clunkers' gets boost
House approves $2B more in funding for gas-guzzler trade-ins

After hours of confusion about whether the Cash for Clunkers program had run out of money, it was game on again Friday for car dealers, TV stations and newspapers, who had worried that one of the few bright spots for their industries would end after just one week.

Dealers around the country pondered Friday whether to pull ads for the program, which was supposed to have run until November or until the $1 billion initially set aside ran out. The deal - which gives up to $4,500 for trade-ins if they meet certain conditions - saw so many sales in its first week that the funds were already dwindling.

But the U.S. House moved to approve an additional $2 billion for the program later Friday. While that scenario played out, there was confusion around the country for shoppers, dealers and advertisers.

In Lincoln, Neb., an ad representative for the Lincoln Journal Star was overheard bemoaning her nightmarish day because all the car dealers were trying to finish up their big Saturday advertisements - but no one knew what was going on with the program.

In Victor, N.Y., Kitty Van Bortel said she was caught in limbo about whether to pull the plug on rebates at the Ford and Subaru dealerships she owns.

'Honestly, in all my years in the car business, I have never seen such a mess. It's just unbelievable,' she said Friday morning, saying she was locked into her advertising for the weekend, no matter the outcome.

The auto industry is the nation's biggest advertiser, though it trimmed its first-quarter spending by 28 percent to $2.31 billion from $3.22 billion in the same period last year, according to TNS Media Intelligence..

Dealers cut ad spending far more than manufacturers, dropping ad purchases 49 percent to $643.9 million in the first quarter. Manufacturers trimmed spending by 15.2 percent to $1.67 billion, from $1.96 billion.

Dealers have been hit particularly hard by the auto industry woes, with manufacturers like Chrysler and GM announcing plans to close thousands of dealerships as they look to cut costs and deal with slumping demand.

The increases in advertising are welcome news for the advertising industry, where overall spending has been falling as companies react to cutbacks in consumer spending and limit their own advertising. Newspapers, television and radio stations and other outlets have seen their profits tumble.