Auto dealers say they still haven't been repaid for the majority of "Cash for Clunkers" deals they have made, creating cash crunches for many as they wait for the government to reimburse them under the popular $3 billion vehicle trade-in program.
Some dealers report they have hundreds of thousands of dollars worth of rebates they have submitted to the federal government for repayment that are still outstanding, including deals that were made in the first days of the program nearly three weeks ago.
Doug Fleming, sales manager for Findlay Chevrolet in Las Vegas, said "Cash for Clunkers" is still a great program from a dealer's standpoint. However, the submission process can be a little tricky.
"The requirements are tough, and it's highly regulated," Fleming said. "There's 160 pages of rules and regulations. A lien on the car, no clear title, two registrations ... little things like that will kill it. I've heard some stores are owed $1 million because they didn't have all their ducks in a row."
Findlay dealers were proactive in preparation for the trade-ins and have actually been paid on about five clunkers, he said. One reason dealers are struggling to get paid is because the government Web site couldn't handle all the online submissions, Fleming said. Findlay has hired someone to work a graveyard shift to submit reimbursement claims when the Web site isn't bogged down.
The automotive industry has been hammered during the recession and the increase in business over the last two to three weeks has been nice, said Jim Mooradian, general manager and president of Courtesy Henderson.
"The consumer comes in and the first thing they need to do is qualify. That's our job," he said. "Once we do determine they qualify, by all means, we go out and pick out a car, sit down, work the numbers, whether there's a manufacturer's discount, a dealership discount or car rebate. Some cars list for $20,000 and consumers without a dime out of their pockets are paying $11,000 and $12,000 when you factor all those rebates in."
The National Highway Traffic Safety Administration, the federal agency overseeing the program, has told dealers they can expect to wait 10 days to be repaid if their paperwork is in order and the deal is approved.
Government officials say a big hitch has been that dealers are not following proper procedures by filing incomplete or inaccurate materials. For example, one of the main reasons "Cash for Clunkers" deals were rejected early on was because dealers failed to write "Junk Automobile, Cars.gov" in black magic marker on the title of the older cars that buyers were trading in.
Las Vegas Review-Journal writer Hubble Smith contributed to this report.