Some dealers pull out

Dealers await Cash For Clunkers money

By Marc Strauss

July 15, 2010 Updated Aug 19, 2009 at 6:23 PM CDT

Pekin car dealer Rory Griggs thinks Cash For Clunkers has worked out a lot better so far for the buyer than for the seller.

"We've delivered about 13 vehicles to customers and we haven't been paid for any of them yet," said Griggs, who runs the Velde GM-Supercenter on Route 29.

That's right. The same government that fines people for paying their taxes late is delinquent reimbursing over a billion dollars to car dealers.

Part of the problem is a backlog of sales that still need to be approved by Washington, even though most of the cars were driven off the lot weeks ago.

"Once we get all of them electronically submitted then we wait for the money to come back," said Velde salesman Christopher Wood. "It was supposed to take 10 days and we haven't seen money yet. As far as I know other dealers haven't either."

According to one dealer customers turning in newer used cars might get an even better deal, and the dealer might make more money, if he were allowed to turn around and sell the clunker instead of destroy it.

In fact, more than 200 dealerships in New York have pulled out of the Cash For Clunkers program. According to the New York Automobile Dealers Association its dealers have been reimbursed for only 2-percent of the rebates they've made to customers.

Terry Allen of Nikles Motor Company in Mason City says the delay in the Cash For Clunkers approval process is the biggest flaw.

"You can't have 15 of these deals hanging out that are between $3,500 and $4,500 apiece," said Allen. "You just can't afford to have that kind of stuff hanging out there."

Griggs says the problem is compounded by low inventory levels.

"You don't have a lot of inventory and then you stick your neck out for $4,500 when you could save that for another customer who doesn't qualify for Cash For Clunkers," said Griggs.

The government is tripling the number of employees processing Cash For Clunkers applications to 1,100. They hope that will accelerate reimbursements to dealers.

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