Dealers Still Waiting for Reimbursement

By: Lindsey Brown Email
By: Lindsey Brown Email

Area automobile dealers are finished with the Cash for Clunkers program, but not with federal bureaucracy.

The program was certainly a boost for dealers, who saw sales of new vehicles go up as people traded their older, less fuel-efficient cars for new models.

Buyers who qualified were able to get up to $4500 off, with the government agreeing to reimburse the dealers. But many of the dealers are still waiting for payment.

It has been almost two weeks since the popular program ended but the staff at John O'Neil Johnson Toyota is still all smiles.

"The Cash for Clunkers, it was an event we have never seen in the car business," said Will Wilkinson. "The traffic that came through the doors, it just made everyone excited. It was a good thing for the economy."

Dealerships have a lot of money wrapped up in the "clunkers" people traded, which are now taking up space on their properties, waiting to be picked up by a salvage company.

So far, the dealership has been reimbursed for only 2 of the 73 cars sold during the program. And while many dealerships across the country are feeling the crunch, this staff says it's confident the money will come eventually.

"Everything has been approved through the submission process," said Wilkinson. "Now they are just being paid as they come up."

But even the weeks of waiting haven't changed minds about the program. Wilkinson said it's exactly what the cash-strapped industry needed, from the dealerships to the manufacturers.

"It put production back for the domestic dealers that didn't have plants open," Wilkinson said. "So far I haven't seen negatives other than dealers worried about payment."

And that might change soon. It looks as if the payment jam has eased a bit. Department of Transportation officials have pledged to have all of the payments processed by the end of the month.

"We would love for them to do it again," said Wilkinson. "People come up and ask me and a lot of people feel confident it will come back."

As of Thursday, $500 million has been paid out to dealers. That's 17 percent of the total owed.

The dealers that saw the biggest increase in sales dating back to August 2008:
KIA 60%
Subaru 51.5%
Hyundai 47%
Ford 17%

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