The U.S scrappage scheme, dubbed “cash for clunkers”, will end Monday 24th August, having run for just a month.
The scheme has been a huge success but has been halted so that payments do not exceed the $3bn (£1.8bn) allocated by Congress.
The scheme offered car buyers discounts of up to $4,500 (£2,700) towards new cars when they traded in old vehicles.
The deadline of 24th August will give dealers and buyers enough time to complete purchases and submit applications for rebates, said the Transportation Department.
“This program has been a lifeline to the automobile industry, jump-starting a major sector of the economy and putting people back to work,” Transportation Secretary Ray LaHood said.
The Transportation Department said it has handled 167,000 (37%) of the 457,476 dealer requests for payback submitted as of today. It is understood around $145m (£88m) has been paid out so far.