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Where's the Cash, for the Clunkers?

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By Neetal Parekh on August 19, 2009 1:14 PM

In a surprise move during a slow period for the auto industry, hundreds of New York car dealers are withdrawing from the federal government popularly known as Cash for Clunkers---officially called the Car Allowance Rebate System (CARS) which offers up to a $4500 rebate for trading in qualifying gas-guzzling cars for new fuel-efficient ones. 

What's the beef?  Auto dealers feel like they are getting a line from the government, you know one that goes something like "the check is in the mail"...

Over 400 dealerships are jumping ship for now because of delays in receiving rebate payments from the federal government.   The president of the Greater New York Automobile Dealers Association reports that dealerships have received only about 2% of the promised payments. 

Reimbursement is one of the several issues that Big Apple dealers are contending with.  Dealers have also lodged complaints for valid deals being rejected for small oversights related to paperwork, such as typos and blank fields.  They are also concerned with the lag-time they face when trying to get a "yes" or "no" from CARS organizers regarding questions on qualification.  The software utilized by the government has also been faulted for containing glitches.  And even when dealers pick up the phone to ask someone directly about questions regarding the program, they are met with long wait-times.  

Cash for Clunkers was recently infused with another $2 billion to help jumpstart the economy. 

The program is administrated by the Department of Transportation which stands behind the success of the trade-in program, which has reportedly generated $1.81 billion in sales for auto dealers in the nation and sales of more than 435,000 cars.

 

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