Cash for Clunkers Sputters Out
Cash for Clunkers, a resounding success? Me thinks not. Economically, I look at the program like I might look at a bag of grain meant for a goose marked to become foie gras. Mmm, let's eat!
Cash for Clunkers, the very successful federal program that has brought car buyers back to showrooms, is about to reach a very rough end of the road.
Auto dealers, among the biggest supporters of the program, are pulling out in large numbers, worried that they won't be reimbursed for the up to $4,500 they have advanced to each customer who trades in older gas guzzlers for more fuel efficient models.
Dealers are complaining that slow processing of paperwork by the Department of Transportation has put them in a cash flow bind, requiring them to advance well over $1 billion so far.
They also worry that the delays in processing their applications could mean there are far more deals in the pipeline, a problem since the $3 billion allocated to Cash for Clunkers is already close to exhausted.
According to the most recent figures from the Department of Transportation, there have been more than 457,000 deals so far, with claims of nearly $2 billion.
Michelle Primm, managing partner of Cascade Auto Group in Cuyahoga Falls, Ohio, said she had done about 31 clunker deals, but only has gotten money back on three of them.
She said she will not close new deals until reimbursement arrives. Even though she knows she is losing sales because of that, she said she can't afford to do otherwise given how much cash is needed to run a dealership.
I find it only mildly humorous that American business owners are concerned that they may get stiffed by their very own government.
Speaking of government, GM has a solution. Instead of sitting around and waiting for a Clunker check that may never come like an idiot, dealers can get money directly from Government Motors! It's all the same, right?
General Motors Co will provide cash advances to dealers to cover "Cash for Clunkers" rebates while the incentives are being processed by the U.S. government, the company said on Thursday.
GM said the action would provide dealers with the liquidity to run their businesses while they wait for their government checks.
Well isn't that sweet?
I don't know where to start with this, so I'm just going to leave it alone. That thing about "if you can't say anything nice..." was created specifically for times like these.