Nothing For Clunkers
You know that “wildly popular” Cash for Clunkers program? It seems that the Federal government isn’t so good about making payments to dealers after the dealers have laid out the cash. In fact, very, very few dealers have been paid for more than a fraction of the deals they have closed. Some are actively talking about dropping out of the program altogether as a result:
A growing number of auto dealers say the process of getting paid under the government’s “cash for clunkers” plan increasingly resembles some of the wrecks accumulating on their lots as part of the program.
The slow payments coming from the federal government are reinforcing the paradoxical nature of the program for dealers: It has generated the most showroom traffic they have had in months while at the same time heaping unease, frustration and worry onto the industry’s worst-ever downturn.
As of the close of business Friday, there was talk in the industry that some dealers are considering pulling out of the clunkers program altogether.
“A number of dealers have floated $100,000 to upwards of $1 million or more” on the clunkers program, said Bill Sepic, president of the Wisconsin Automobile & Truck Dealers Association.
Dealers say they want to see at least some sign that they will be able to recoup that money. Still others need the money to pay bills and meet payroll.
“This is not a Wisconsin problem,” Sepic added. “This is going on across the country.
“We are hearing some dealers who are either strongly considering or have stopped participating in the program. Right now, the dealers are feeling very vulnerable.”
Some dealers have made hundreds of deals but have only been paid for three or four so far. This is a real problem for a lot of dealers who need to meet payroll or expenses. The program is supposed to pay out in ten days – it has been three weeks and no sign of payments.
I have pointed this out before: Do you really want people who cannot handle even a few billion dollars running health care with a price tag of at least a trillion dollars?
Government inefficiency grows exponentially as the dollars involved increase.
