Wednesday, August 19, 2009

Hundreds of NY dealers pull out of clunker program

NEW YORK (AP) - Hundreds of auto dealers in the New York area have withdrawn from the government's Cash for Clunkers program, citing delays in getting reimbursed by the government, a dealership group said Wednesday.

The Greater New York Automobile Dealers Association, which represents dealerships in the New York metro area, said about half its 425 members have left the program because they cannot afford to offer more rebates. They're also worried about getting repaid.

"(The government) needs to move the system forward and they need to start paying these dealers," said Mark Schienberg, the group's president. "This is a cash-dependent business."

The program offers up to $4,500 to shoppers who trade in vehicles getting 18 mpg or less for a more fuel-efficient car or truck. Dealers pay the rebates out of pocket, then must wait to be reimbursed by the government. But administrative snags and heavy paperwork have created a backlog of unpaid claims.

Schienberg said the group's dealers have been repaid for only about 2 percent of the clunkers deals they've made so far.

Many dealers have said they are worried they won't get repaid at all, while others have waited so long to get reimbursed they don't have the cash to fund any more rebates, Schienberg said.

NY dealers pull out of clunkers program

After reading the AP report above, I can only surmise that this "slow/non-payment" issue is likely affecting dealers nationwide - a mere 2% NY repayment rate - Wow! I would say unbelievable, but nothing really shocks me anymore...

Hat tip Justin for link!


Anonymous said...

I overheard on the local St.Louis evening news about dealers there complaining about not seeing any money. Here's another pertinent article with a snippet.

Some dealers have complained that the government couldn't keep up with the thousands of requests for refunds that poured in, and many have simply refused to take part in the program. "The federal government can't process a simple rebate," thundered Rep. Pete Hoekstra, R-Mich, one of several House Republicans who blasted the clunker program. "I've got dealers who have submitted the paperwork three times and have gotten three rejections. What is a dealer supposed to do?"

Yeager conceded that his dealership has yet to see a dime of the government's money, which he called "very scary." But he also noted that his salesmen have sold about 600 cars this month. "We're rockin' and rollin'," he said. "It feels like the olden days. This would have been a good solid week back in our heyday. It helped make our July, and it's going to get us off to a great start in August. I talked to a couple of people who told me if it wasn't for this program, they were going to keep driving their 200,000-mile car indefinitely."New $2 billion in cash for clunkers program gets South Bay dealers rockin'


dyana said...

I think "slow/non-payment" issue is likely affecting dealers nationwide
Thanks for sharing this post with us......

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Anonymous said...

You know China may be holding it up. HA HA HA

Anonymous said...



Anonymous said...

"You know China may be holding it up. HA HA HA" ROTFL..

I wonder how many dealers who are not getting paid botched the paperwork or allowed ineligible cars thru to get a quick sale?