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Government Slow Paying Dealers For Cash For Clunkers

Dealers Feeling Cash Crunch

POSTED: 5:03 pm MDT August 17, 2009
UPDATED: 6:42 pm MDT August 17, 2009

Cars may be selling fast under the Cash for Clunkers program, but the government’s payments are coming in slowly, according to Colorado dealers waiting for their claim money to come in.

The slow pace may force some dealers to stop taking part in the program and in the end, consumers may pay the price.

Shortline Automotive in Aurora has the clunkers.

What they don’t have is the cash.

"I didn’t think it was going to take this long to get it resolved,” said John Bowell, vice president of Shortline Automotive.

Bowell said his dealerships have sold about ninety cars under the Cash for Clunkers program, but after more than three weeks, the government has paid the rebate for only eight of them.

”That’s $33,000 out of the $300,000 that they owe us,” said Bowell.

But that’s better than Planet Honda and Planet Hyundai in Golden.

Those dealerships have sold 140 cars and gotten rebates for two.

Cash for Clunkers is supposed to pay the dealers back within 10 days of approving the deal, but dealers in Colorado said the government isn’t following its own guidelines, which is putting a strain on dealers’ cash flow and, ultimately, hurting consumers.

”You’ll see a lot of dealers start to pull back because we don’t know where the funds run out, and we don’t want to be in the situation where we have to renegotiate with customers,” said Lee Payne, owner of Planet Honda and Planet Hyundai.

He said he’s considering pulling out of the program this week.

The National Highway Traffic Safety Administration, which is overseeing the program, said more than $1.5 billion, about half of the money allotted, in claims have been submitted by dealers, but there was no estimate on how much had actually been approved or paid out.
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