NADA says Cash for Clunkers should be ended now

The National Automobile Dealers Association says that the "Cash for Clunkers" program is so poorly run that it should be shut down immediately. Despite Transportation Dept. Secretary Ray LaHood's promise that all dealers submitting valid applications would be reimbursed.

However, the NADA said, in its statement, that the group had “confirmed elsewhere” that dealers would not get paid if cash ran out.

Although, according to press reports, Secretary LaHood stated today that “there will be no car dealer that won’t be reimbursed,” NADA believes that this is based on DOT’s view that sufficient funds remain available. It is important to note that NHTSA has confirmed elsewhere that if the program’s money runs out before a dealer is reimbursed, that dealer will not be paid.

In a survey of nearly 800 dealers,

97% of dealers who responded, say the government is not reimbursing fast enough
13% of dealers have dropped out the program because the government is not reimbursing fast enough
87% percent of dealers are concerned the money will be exhausted
3% of CARS program deals have been reimbursed
66% of dealers have not received one payment from the government
25% of dealers are experiencing severe cash flow problems that require short-term loans to alleviate ...

READER REACTION

“The lack of cash is killing us,” one dealer said in the survey. “The lack of any kind of feedback from the government for the rebate applications is appalling.”

“My office manager got so fed up last week, she threatened to quit.”

“As I stated when the program first started, do not roll out a program until all the i’s are dotted and the t’s are crossed. That is just good business 101.”

“We stopped because we have only gotten two payments out of 120,” another dealer said. “They keep rejecting for various reasons, and the process is entirely too slow.”

“As a dealer, I would just as soon this program had never been approved despite the sales,” one respondent said. “It is a nightmare for all of us"

Index of related posts.

Well, ask and ye shall receive: "Obama admin. to end cash for clunkers on Monday."

"It's been a thrill to be part of the best economic news story in America," Secretary Ray LaHood said in a statement. "Now we are working toward an orderly wind down of this very popular program."

Through Thursday, auto dealers have made deals worth $1.9 billion and are on pace to exhaust the program's $3 billion in early September. The incentives have generated more than 457,000 vehicle sales. Administration officials said they have reviewed nearly 40 percent of the transactions and have already paid out $145 million to dealers.

Well, the the wind down of the C4C program turns out to be "orderly," it'll be the only orderly thing about it.

So the feds have paid out 4.83 percent of claims so far. That means that a dealer that sold 50 cars, averaging $4,000 "rebate" per car has loaned $200,000 of its own money to the government but has received only $9,667 back. And that equation explains why dealers were dropping out before now.