U.S. won't suspend auto clunkers program: official

The U.S. government will not suspend its $1 billion cash for clunkers auto sales incentive even though confirmed sales and pending transactions neared the limit of 250,000 vehicles much sooner than expected, an Obama administration official said on Thursday night.

The White House was working with Congress to try to extend funding for the program, said the official, who was not authorized to speak for attribution.

The program, designed to spur U.S. auto sales through consumer incentives was formally launched six days ago and exhausted the funds available after an avalanche of business.

The program had been expected to run through September 30.

Cash for clunkers authorized up to $4,500 in rebates for car buyers who traded in their gas guzzlers for more fuel-efficient vehicles.

The government launched the program on July 24 and said late on Thursday that sales and pending sales had neared the limit of 250,000 vehicles.

Congress approved the initiative mainly to help General Motors Corp, Chrysler Group and Ford Motor Co pull out of a severe industry sales slump that has worsened amid the U.S. economic recession.

The weak sales environment contributed to bankruptcies at GM and Chrysler this spring.

The trade-in program was also open to consumers who wished to purchase imported vehicles, mainly passenger cars from Asian and European automakers. Domestic manufacturers tend to sell more sport utility vehicles and pickup trucks.

(Writing by John Crawley; Editing by Chris Wilson)