Dealers not getting cash for clunkers

Only 3 reimbursements paid by government so far from 80 local car sales

KINGMAN - It started, it stopped, then it started once more; but as of last week, the Car Allowance Rebate System, also known as "Cash for Clunkers," finally hit the finish line.

By most accounts, the program was a fantastic success for the ailing American auto industry, giving hundreds of thousands of people the chance to save up to $4,500 off the price of a new, more efficient vehicle by trading in an older one with poor gas mileage.

But now that the program is over, many car dealers are wondering when they'll start seeing the government refunds for all those discounts they gave consumers over the past two months.

Curtis Cutshaw is the general sales manager for the Martin Swanty Chrysler/Dodge/Jeep dealership at 2620 Andy Devine Ave. Between his dealership and the neighboring Kia dealership, Cutshaw said Swanty has made 26 CARS trade-ins, but none of the reimbursement applications have been approved by the Department of Transportation, meaning each dealership is still out about $4,000 per deal.

"That comes out to about $104,000 total," Cutshaw said. "Everything's in review. When we call in, it takes anywhere from 45 minutes to two hours to get a live person on the phone."

And even then, he said, the person answering is usually someone who isn't in any position to explain the status of his reimbursement applications. He noted that 14 of his dealership's applications have already been denied for reimbursement, but claimed that many of those were due to oversights or mistakes made on the part of the DOT, not the dealership.

"You want to have faith in your government, but it's scary right now," Cutshaw said. "A lot of customers had the perception that the money (we) get from the government was just straight profit on the deal. Basically we're in the hole; we've got to pay the sales tax out, we've got to pay the licensing fees, and we've got to pay off the company that's flooring the car."

All the same, however, Cutshaw said the program fulfilled its purpose of generating excitement and sales of new and used vehicles alike. He just wishes the red tape were a little less sticky.

"It was a tremendous program that did what they had in mind for it to do," he said. "It's just the other part with the paperwork has been very frustrating."

Nick White, the sales manager at Martin Swanty Hyundai, said that the biggest problem with waiting for reimbursement is that without the money on hand, dealerships have a harder time refilling their lots once their stock of vehicles is gone.

"This is a business that's very dependent on cash flow, on liquid cash, because that's how we replenish our inventory," White said. "It's about half of what it normally is, if not worse than that, and we didn't really take any trades on the clunker deals because all those were destroyed."

White's dealership has been among the most successful with the CARS program, making 39 deals through July and August. Of those, however, only one has been approved for reimbursement, leaving his dealership out more than $150,000.

"With us, we're hoping to see them by the end of next month to be completely cashed out, which is a far cry from the initial 4 to 10 days we were promised," White said. He added that the program put dealers in the uncomfortable position of having to choose between either embracing the program and putting their liquidity at risk, or ignoring it and missing out on a guaranteed boost in sales.

Colorado River Ford at 3601 Stockton Hill Road was among the first local dealers to advertise the CARS program. Even so, sales manager Tom Sissom said the dealership made a conscious choice to stop participating after making about 15 deals, only two of which have been paid for.

"We cut off the program a long time ago, I would say a week after (Congress) moved it to $3 billion," Sissom said. "They keep saying 'Hurry up and wait,' and we haven't heard anything since what we heard at the beginning of the program. I don't know how much money's left; I don't know who's getting paid."