Cash for Clunkers: Good and Bad News in Wake of Program's End

Aug. 27, 2009— -- When Kevin Murphy logs in to the government's "Cash for Clunkers" computer system, he sees two very discouraging words: "under review."

That was the status yesterday of all seven "Clunkers" rebate requests that Walker Motors, where Murphy is a sales manager, submitted to the federal government. The value of the requests made by the small Ford dealership, which is based in Montpelier, Vt., total more than $30,000.

"It's absolutely terrible," he said. "We haven't gotten paid anything yet."

Though the "Cash for Clunkers" program is officially over, complaints persist over how long the government is taking to reimburse dealers who, under the program, gave customers rebates of up to $4,500 when they traded in old, fuel-efficient cars for new ones.

The Department of Transportation eased some concerns yesterday when it reported that dealerships submitted nearly 700,000 rebate requests totaling $2.877 billion, below the government's $3 billion budget.

The DOT also said more than 2,000 people are now processing dealer requests. But the department didn't reveal what percentage of the requests had actually received funding and when it expected all dealers to be paid back.

"Some people have gotten (reimbursements), but they're still slow, they're still trickling in," said Jessica Caldwell, a senior analyst with the auto research site Edmunds.com.

Some dealerships, she said, have now been waiting a month for reimbursements.

"You'd think at some point, people would be getting money," she said.

It's a problem, she said, that continues to hurt some customers because some dealers refuse to make good on Clunkers sales until they get their government reimbursements.

The government, meanwhile, continues to tout the economic benefits for Cash for Clunkers. While critics have argued that the program would only produce a short-term boost to the auto industry at the taxpayers' expense, analysis released by the DOT and the White House Council of Economic Advisers paints a rosier picture.