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> Cash for Clunkers is done
Southsider2k12
post Aug 20 2009, 09:18 PM
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'Cash-For-Clunker' Program Ending On Monday

The Obama administration plans to end the popular $3 billion Cash for Clunkers program on Monday at 8 p.m EDT, the Department of Transportation announced Thursday.

Two congressional officials familiar with the plan say the Transportation Department will wind down the program that offers car buyers rebates of $3,500 or $4,500 for trading in older vehicles for new, more fuel-efficient models.

Transportation Secretary Ray LaHood said in a statement that the program has recorded more than 457,000 dealer transactions worth $1.9 billion in rebates as of Thursday.

Government analysts have projected there is enough money to continue accepting applications for rebates until the deadline of Monday, Aug. 24, at 8 p.m. EDT the statement said.

Meanwhile, the financial arms of several automakers have begun offering help to cash-strapped dealerships, in some cases by floating loans to help cover clunker-related shortfalls.

Woman looks at new Toyota Camry on dealer lot

Department officials met with car dealer trade groups on Wednesday to discuss how the program will eventually end and respond to complaints over a backlog of rebate payments to dealers.

Through early Wednesday, auto dealers have made deals worth $1.81 billion and are on pace to exhaust the program's $3 billion in funds in early September.

The incentives have generated more than 435,000 vehicle sales but dealers want a clear plan on when the rebates will no longer be available so they don't end up on the hook for any of the incentives.

"We want to make sure that dealers know when we're getting close" to running out of the money that was allocated for the program, LaHood told reporters.

LaHood said he recognized that "dealers are frustrated. They're going to get their money."

The National Automobile Dealers Association said its trade group met with Transportation officials to discuss dealer concerns about reimbursement delays and ways of fixing the problems.

NADA spokesman Charles Cyrill said the association "stressed the importance of addressing—as soon as possible—how the program will end, including the possible suspension of the program."

Dealers have complained of delays in getting their reimbursements approved, causing a cash crunch at their dealerships. Dealers typically borrow money to put new cars on their lots and must repay those loans within a few days of a sale.

"We do not know how many deals are in the pipeline. We don't know how many dollars are left in the program at this very moment," said Ted Smith, president of the Florida Automobile Dealers Association. "That's fundamental to the health of the dealerships that are participating. If you run out of money before you run out of deals, that's not a good situation."

Some dealers are no longer participating in the Clunker program.

The Greater New York Automobile Dealers Association, which represents dealerships in the New York metro area, said about half its 425 members had left the program because they cannot afford to offer more rebates.

Melanie Bible, spokeswoman for the Pennsylvania Automotive Association, also said about half of the state's 950 dealerships have stopped cutting new Cash for Clunkers deals.

She said the figure was anecdotal because no formal survey of dealers had been conducted.

Toyota Financial Services is offering loans to dealers for up to 60 days to cover the lag between a dealership's payment and its reimbursement. The financial-services arms of Honda Motor, Nissan Motor, Ford Motor and other automakers are offering similar programs.

The government's online reimbursement system was flooded with reimbursement requests shortly after the program began in late July, overwhelming the computer system and staff set up to process the deals. That led to big delays for dealers trying to file the paperwork they needed to get paid back for the rebates.

LaHood said some of the submitted paperwork has been incomplete or inaccurate, leading to delays.

He acknowledged the Transportation Department did not have enough people to process the paperwork but said DOT was ramping up staff.

DOT said earlier this week it was tripling its work force to handle the rebates and expected to have 1,100 workers dealing with the paperwork by the end of the week.

Michelle Primm, managing partner of a four-franchise dealership in Cuyahoga Falls, Ohio, said her store has stopped making deliveries on clunkers purchases until the sales are approved by the federal government.

Primm's dealership has made 31 clunkers deals since the program was launched last month, but has only been paid for 3.

"I've got payroll and I've got taxes to pay and all those things," she said. "We're small."
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digger262
post Aug 21 2009, 02:00 PM
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It's not done yet.....it will start to be done in 12-18 months when a slew of repossessions take place. While obviously not as huge as the mortgage crisis, this is designed very similar.
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Ang
post Aug 22 2009, 12:09 PM
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I'm glad my car is finally paid off! Now I've got to put money into it for repairs that needed to be done while I was making car payments and couldn't afford it.


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Southsider2k12
post Aug 22 2009, 08:42 PM
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QUOTE(Ang @ Aug 22 2009, 01:09 PM) *

I'm glad my car is finally paid off! Now I've got to put money into it for repairs that needed to be done while I was making car payments and couldn't afford it.


I have three more trips to make to Horizon, and the title is mine, all mine!
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Tom Burns
post Aug 23 2009, 06:13 AM
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At a Rotary meeting in Illinois last week I sat next to a GM/Chrysler dealer who told of the same problems quoted here and in addition his office staff had to work overnight to submit paper work on time. Then Friday night I ran into Dennis Hirsh and his wife at Stadium Inn at dinner and heard the same story again. The amount of paperwork a dealer must compile even without the present program is beyond reason. Years ago my father was a dealer and his only paperwork for purchase of a car was a green restaurant-type bill he gave as a receipt to someone who bought a car, actually from the restaurant my mother owned next door.
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Southsider2k12
post Aug 23 2009, 09:01 AM
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There are a lot of reports of payouts to dealerships taking forever as well. AutoNation, the largest dealer in the country is supposed to be owed over 45 million dollars.
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lovethiscity
post Aug 23 2009, 04:29 PM
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QUOTE(southsider2k9 @ Aug 23 2009, 10:01 AM) *

There are a lot of reports of payouts to dealerships taking forever as well. AutoNation, the largest dealer in the country is supposed to be owed over 45 million dollars.

It must be nice to be owed that much in todays economy. The cash for clunkers seems to be worth all the paper work and waiting. $45,000,000 represents a minimum of 10,000 cars sold by AutoNation alone. That is a pretty good sales list during what is almost a depresion.
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Ang
post Aug 23 2009, 09:03 PM
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QUOTE(lovethiscity @ Aug 23 2009, 05:29 PM) *

It must be nice to be owed that much in todays economy. The cash for clunkers seems to be worth all the paper work and waiting. $45,000,000 represents a minimum of 10,000 cars sold by AutoNation alone. That is a pretty good sales list during what is almost a depresion.

It would be nicer to collect that much money instead of just having it owed to you. laugh.gif


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