Officials set Sept. 30 as goal to pay dealers on clunkers
DETROIT -- The Department of Transportation is kicking up efforts to pay dealers who sold cars under the federal cash-for-clunkers plan and hopes to process all outstanding rebate claims by Sept. 30.
A spokesperson for the National Highway Traffic Safety Administration, who did not want to be identified because the government's data are not yet public, said the government will have 5,000 workers handling claims by the middle of the week, up from the 3,000 now.
So far, the government has paid $500 million to dealers, the spokesperson said, or about 17% of the total claims. By next week, the government hopes to be paying out $100 million a day.
The program, officially the Car Allowance Rebate System, ended last week. Its $3 billion pot was used up nearly a month earlier than expected. The program offered up to $4,500 for trading a qualifying older vehicle for a new, more fuel-efficient one.
Once all the applications are sifted through, there may be money left in the pot, the government spokesperson said, because some percentage of the applications will be rejected. That money will go back to the Treasury Department.
John McEleney, chairman of the National Automobile Dealers Association, says he's happy the government has set the Sept. 30 goal to pay dealers.
"It's taken longer than we would like; a lot of our members are strapped for cash," he said.
He's confident that all eligible applications will be paid, which had been a worry when it looked like the government was going to run out of money.
But what constitutes an eligible application is up for debate. The government is reportedly being very strict about the details. If there are mismatching numbers on the applications, the forms are rejected and sent back to the dealer for resubmission. If the buyer was late paying insurance or registration in the past year — the rules require having owned and insured the clunker for at least a year — deals are being shot down, as well, even if the buyer already has the new car.
