Car dealers: 'Cash-for-clunkers' payments running late
WASHINGTON -- Auto dealers say they still haven't been repaid for the majority of "cash-for-clunkers" deals they have made, creating cash crunches for many as they wait for the government to reimburse them under the popular $3 billion vehicle trade-in program.
Some dealers report they have submitted hundreds of thousands of dollars worth of rebates to the federal government for repayment that are still outstanding, including deals that were made in the first days of the program nearly three weeks ago.
Duane Paddock, who owns a Chevrolet dealership near Buffalo, said dealers may stop selling vehicles under the clunkers program because of the funding delays. "It's just killing dealer cash flow right now," said Paddock, co-chair of GM's northeast region dealer council.
The National Highway Traffic Safety Administration said dealers have submitted requests for rebates that total $1.5 billion — half of the money allocated to the program — through the online system set up to process and pay the claims. But NHTSA did not provide a dollar figure for the amount paid since the program began July 27.
The program has also been plagued by heavy demand that has overwhelmed the computer system and review process NHTSA set up. The agency has since hired more staff to process claims and has increased the capacity of the computer network. NHTSA has also held regular information sessions with dealers to help them file claims that will meet the legal requirements for reimbursement.
"The Department of Transportation is committing enormous resources and working overtime to process the overwhelming volume of applications both quickly and responsibly," DOT spokeswoman Sasha Johnson said.
Car buyers are eligible for discounts of $3,500 or $4,500 depending on the fuel economy of the vehicles they trade in and buy. Dealers take the amount of the rebate off the sale price, then submit paperwork to the government proving the sale and that the trade-in will be scrapped.
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