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Dealers Suspend Cash For Clunkers Program Over Money Concerns

Posted in auto industry, Car Buying, Car Deals, Cars, Cash for Clunkers, New Cars, Newsworthy, Old Cars by Suzanne Denbow | August 18th, 2009 | 7 Responses |


Although the Cash for Clunkers program has created a significant influx in traffic for ailing dealerships, the risks are rapidly beginning to outweigh the benefits. According to well-publicized reports, the program has been an overwhelming success and consumers are blowing through the allotted $3 billion at an alarming rate. Dealers are selling a record number of vehicles and racking up rebate tabs in excess of $200,000, but cryptic problems with fund disbursement have prevented them from seeing a penny of it. Since the CARS program strictly prohibits dealers from delaying a new car purchase until the rebate is received, each new sale has morphed into a $4,500 dealership loan that many businesses have exhausted their working capital in order to float. Justifiably wary of shelling out any more cash in return for what is essentially a 6-figure IOU, many dealerships have opted to temporarily suspend participation in the program until they’re sure they will be repaid.

“They rolled the program out and told us we’d get paid in 10 days. It’s been three weeks,” said Jim Griffin, a Wisconsin dealer. “We need that money to pay our rent, to pay our light bill, pay our people.”

Source: AutoNews, Milwaukee-Wisconsin Journal-Sentinel
Image Cred: Reuters Pictures

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7 Responses

  1. Marc Sketchler says:

    My grandmother just bought a ’10 Equinox with the goal of using the CARS programme on a ’98 Dodge Ram V6. The dealership down the bayou didn’t feel like doing all the paperwork, so they gave her $4500 on the trade.

    I’ll save you looking up the Blue Book value on the Ram. It’s about $1300.

  2. John Fleming says:

    Wow that is a picture of the dealer I work in parts at, Superior Pontiac in Dearborn, MI. Anyway what we do is not sodium silicate the engines in the clunkers until the dealer gets the check.

  3. Biotech is Eggzilla says:

    That dealer is on Michigan Avenue right? I used to wander the dealerships of Michigan Avenue for hours on end when I went to UofM Dearborn for a year.

  4. John Fleming says:

    Yeah, thats us right on Michigan Ave. I’ve actually worked at 3 of the car stores on Michigan ave over the years.

  5. U.S. Transportation Secretary Ray LaHood announced Thursday that after a wildly successful run, the cash for clunkers program will come to a close on Monday, August 24th at 8 p.m. EDT

  6. jasonbradyut says:

    Good…, as they say, all good things come to an end. Actually, this could be considered a BAD thing b/c it’s CRAZY, we are giving people money to live more vicariously and lavishly than before all this economical bust took place? What are we doing? Spoiling every single last American? Let’s learn to live in moderation, then we wouldn’t have so much debt…Well, the fish sticks from the head..so the head is the While House…right?

  7. Could this be the holy grail – finally a stimulus program I can actually qualify for? I’m not holding my breath though. So far I haven’t been able to qualify for any government dole.