Dealers wait for Clunkers funds

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— Cash for Clunkers was like a bittersweet candy, Victory Motors co-owner Steve Maneotis said.

There's enough to like, but something about it doesn't work.

"I thought the theory of the program was excellent," Maneotis said. "It did create some traffic, but the management of the program was not very good. : We're still in a limbo status, wondering if we're even going to get paid."

The federal government's Cash for Clunkers program, or Car Allowance Rebate System, offered consumers a $3,500 or $4,500 credit for trade-ins toward the purchase of a new car.

Deals had to meet certain requirements, as well.

Trade-ins were required to be 25 years old or newer, and generally get less than 18 miles per gallon, though standards for large trucks or cargo vans differed.

Buyers also had to prove they owned the trade-in for the past 12 months and had it insured that entire period.

The vehicles purchased also had to meet mileage requirements, which is why Maneotis said several people interested in buying new trucks didn't qualify for the program, such as large Dodge diesel trucks.

In total, he said there were 20 to 25 people who were interested in the program but didn't qualify, either because they wanted an invalid vehicle or they didn't meet other requirements.

Although Victory Motors didn't sell many vehicles through Cash for Clunkers, its small participation in the program was partly by design, and may prove a blessing, Maneotis said.

Some statewide dealers are nervous the government may not approve the credit deals they made with customers, said Tim Jackson, Colorado Automobile Dealers Association president.

With three Cash for Clunkers deals submitted, Maneotis and Victory Motors are on the hook for $13,500.

Some dealers in the Denver metro area have submitted 100 or more deals, Jackson said, and not many have been paid.

The Colorado situation is similar to the rest of the country.

Sasha Johnson, U.S. Department of Transportation press secretary, said the latest figures show the DOT has processed more than 150,000 applications - about 22 percent of the 690,114 applications received - and approved $140 million of the $2.9 billion in deals submitted by auto dealerships.

Jackson said he didn't know how much money was paid to Colorado businesses yet, but said his sense was it would be the same percentage as nationally.

"I can't say this for sure today, but going into midweek this week, less than 10 percent of deals submitted by Colorado dealers have been paid," he said. "I think the vast majority of these will be paid, but (dealers are) apprehensive right now because they've had so many problems with the program."

Cook Chevrolet owner Scott Cook said the government denied Thursday his business's first deal, submitted about a month ago, because of a paperwork error.

Cook said he and his staff fixed the error and the government readmitted the deal for review, but now the deal is at the bottom of the pile, and there's no timeline Cook knows of for when he will be paid.

So far, Cook said he hasn't received any of the roughly $70,000 submitted for Cash for Clunkers deals.

Cook Chevrolet sold 18 new cars through Cash for Clunkers, Scott said.

He added that the majority of his sales were Subarus, a line of fuel-efficient, four-wheel drive vehicles that seemed to land on the line between government requirements and consumer desires.

As it happened, the government's mileage and other requirements disqualified more domestic vehicles than their foreign counterparts, Cook said.

Looking at the federal government's data, that would seem to make sense.

All of the top 10 trade-in vehicles are from domestic manufacturers, and only two of the top 10 new vehicles purchased were U.S. makes.

However, General Motors and Ford did benefit from the program, netting 17.6 percent and 14.4 percent of total sales, respectively. The companies' returns were good enough to rank second and third among manufacturers.

Toyota had the largest share of new sales, with 19.4 percent.

Chrysler came in seventh with a 6.6 percent share, behind Honda, Nissan and Hyundai.

Comments

jimhenry2708 5 years ago

People say it is a good idea to negotiate the new car price before you tell the dealer that you have a clunker!

Jimhenry Blogger www.cashforclunkersfacts.info http://www.cashforclunkersfacts.info

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