Update1: Cash for Clunkers Ends Mondayby Tim Manni
UPDATE1: The Associated Press reports that Cash for Clunkers will expire Monday, August 24 at 8 p.m. EDT, since the funds supporting the program have expired:
President Barack Obama said in an interview Thursday that the program has been “successful beyond anybody’s imagination” but dealers were overwhelmed by the response of consumers. He pledged that dealers “will get their money.”
(Original post, “NADA: We Want Clunkers Suspend By Tomorrow,” published on 8/20/09 @ 2:20 pm)
That’s what officials at the National Automobile Dealers Association (NADA) told the White House yesterday. According to a survey by the NADA, the $3 billion allotted to the Cash for Clunkers (C4C) program has already been spent and dealers aren’t receiving their cash for the completed trades:
A suspension would allow dealers to submit all pending claims and permit the government to process them so that a precise determination could be made of how much money, if any, is left in the program, [NADA Chairman John McEleney] said.
The Department of Transportation (DOT) has conducted their own dealer survey and says that they will compare the results from each. DOT Secretary Ray LaHood said the White House will announce a wind-down strategy for the program within the next couple days to ensure that dealers get the money they are owed:
“I know dealers are frustrated, but they’re going to get paid,” [said LaHood].
[LaHood] blamed delays on dealers’ failure to fill out claims correctly and on the unexpected volume of vehicles purchased under the program.
According to a Reuters article, General Motors will begin fronting their dealers cash advances to make up for the government’s slow repayment. As far as we know, GM is the only automaker providing such advances. We wonder where GM is getting the money for these cash advances — is it coming from their “bailout money”?
If you remember back to early July, we wrote a post that questioned the government’s influence over GM and whether it was hurting the automaker financially:
The Appropriations Committee approved by voice vote a plan…to effectively force the two automakers to restore their prior franchise agreements with dealers as a condition of being partially owned by the U.S. government as they work their way through bankruptcy proceedings.
One could argue that restoring the franchise laws will be counter-productive given GM and Chrysler’s financial constraints.
The combination of auto dealers pulling out of the program in droves, and the reports that all the appropriated money is gone, should spell the end of Cash for Clunkers sometime next month.