The federal cash-for-clunkers car sales program ran out at 8 p.m. ET Monday, but the government gave dealers until noon ET Tuesday to file for repayment after the digital applications swamped the government computer system.
The Department of Transportation (DOT) system was slow all weekend, dealers say, and crashed Monday afternoon.
Dealers must electronically submit several pages of forms and scanned documents for each clunker deal.
The DOT said that as of early Monday, applications for $2.58 billion worth of vouchers had been submitted for the program, which had a budget of $3 billion.
Dealers have so far received, however, a small fraction of the money they are due in reimbursement for the cars they sold — which, in most cases, customers have already taken home and consider theirs.
Dealer chain AutoNation says it is owed $45 million by the government for 12,100 clunker transactions — but isn't worried.
"We have no doubt the government is going to pay us," says spokesman Marc Cannon. "We realize this program was a huge success; it was a stampede in 30 days. … We are confident they are going to catch up."
Don Mushin, general manager of Hollywood Toyota/Scion in California, says a reason for slow pay is that the government is nitpicking every serial number on the documents or rejecting applications for a customer's late insurance payment. The program required that the clunker have been continuously insured for the past 12 months. His store has done 185 cash-for-clunkers deals and been paid for just 15.
He's worried about making sure all the deals go through correctly and had some staff working until 3 a.m. last week on the paperwork. His wife, Nina, came in Saturday to enter deals into the government's system.
"There's 14 pieces of this puzzle that you have to have right, and if any of those 14 aren't right, the deal will be rejected," he says. "I didn't want any of that to happen."
The White House is pleased with the cash-for-clunkers deal. Brian Deese, special assistant to the president on economic policy, says that even though sales may slow after the program, automakers are increasing production for the rest of this year to replenish depleted inventory.
"They are still creating jobs they wouldn't have created otherwise, and that's really why this is a good stimulus," Deese says. "When you have such an effect on an entire industry, it sustains itself."