Hundreds of car dealerships in New York are pulling out of the “Cash for Clunkers” program today citing fears that the government may not be able to properly reimburse them. The program offers up to $4,500 dollars per vehicle for customers purchasing a more fuel efficient car or truck. However the dealerships must pay the rebates out of pocket, and then must wait to be reimbursed by the government. The program has been and administrative nightmare so far, the initial funding for the program was burned through in only 4 days.
“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.”
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.
“The program is a great program in the sense that it’s creating a lot of floor traffic that a lot of dealers haven’t seen in a long time,” he said.
“But it’s in the hands of this enormous bureaucracy and regulatory agency,” he added. “If they don’t get out of their own way, this program is going to be a huge failure.”
The program is administered by the Department of Transportation. Transportation Secretary Ray LaHood said Wednesday that dealers will be repaid for the clunkers deals they have completed.
“I know dealers are frustrated. They’re going to get their money,” LaHood told reporters. He said the Obama administration would soon announce how much longer the $3 billion car incentive program will last.
Through early Wednesday, auto dealers have made clunkers deals worth $1.81 billion, resulting in 435,102 new car sales, according to the DOT.
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