Visit Bill Freehling's blog: Business Browser

Some local car dealers are complaining that they have not yet been reimbursed by the government for hundreds of thousands of dollars in rebates they've given to buyers through the Cash for Clunkers program. MIKE MORONES/THE FREE LANCE-STAR Visit the Photo Place

Dealers waiting for 'clunker' payback

Auto dealers having a hard time getting reimbursed by federal government under Cash for Clunkers

Date published: 8/18/2009

BY BILL FREEHLING

Cash for Clunkers is creating a cash crunch for some local auto dealers.

Several Fredericksburg-area dealers are owed hundreds of thousands of dollars in reimbursements from the federal government as part of the popular program.

"Nobody likes having those kind of receivables out there," said Dave Eadie, general sales manager for Purvis Ford Lincoln Mercury near the Fredericksburg/Spotsylvania County line. Eadie said Purvis hasn't been reimbursed for a single one of its clunker deals and is owed "well over a couple hundred thousand dollars."

Cash for Clunkers, which started July 24, allows buyers to get up to $4,500 from the federal government toward the purchase of a new car or truck if they trade in a vehicle getting worse than 18 miles per gallon. The trade-in is then destroyed.

The rebate is subtracted from the price of a new car, so there's little hassle for consumers. But the dealers must carefully fill out a pile of paperwork and properly submit it to the U.S. Department of Transportation to get the rebate.

Virginia auto dealers had submitted reimbursement requests for nearly $50 million as of Friday morning, according to data from the Car Allowance Rebate System. But according to a survey done last week by the Virginia Automobile Dealers Association, dealers had been reimbursed for less than 3 percent of the clunker transactions.

Richard Kreisner, who owns Fredericksburg Kia, and Bill Britt Sr., who owns the local Mazda, Suzuki and Volkswagen dealerships, said they haven't received a single penny for their clunker deals. The two men are owed more than $500,000 combined.

Britt said he's confident he will eventually be repaid, but he is "just going to cut off" the program if that doesn't happen soon.

He said the government has rejected some of his deals because of "Mickey Mouse" problems dealing with paperwork filled out incorrectly. And he said there's nobody to speak with to address the problem.

In a statement, an official with the U.S. Department of Transportation said the department is "committing enormous resources and working overtime to process the overwhelming volume of applications both quickly and responsibly while getting rebates paid for complete and valid deals."

"The information we are asking for is required under law to make sure we provide money only for legitimate transactions," the statement added.

Bill Freehling: 540/374-5405
Email: bfreehling@freelancestar.com

Here are some statistics as of Friday morning from the U.S. Department of Transportation on the Cash for Clunkers program. U.S. dealers had submitted requests for $1.5 billion in reimbursements. Congress set aside $3 billion for the program. The top 10 new vehicles purchased, in order, were: Toyota Corolla, Honda Civic, Ford Focus, Toyota Camry, Toyota Prius, Hyundai Elantra, Ford Escape, Honda Fit, Nissan Versa and Honda CR-V. 52 percent of the vehicles purchased under the program were manufactured in America. The average gas mileage for trade-ins was 15.8 mpg; the new vehicles average 25 mpg. The states with the most voucher requests, in order, were: California, Texas, Michigan, New York, Ohio, Illinois, Pennsylvania and Florida. For more numbers, check out fredericks burg.com/blogs/bizbrowser.

Follow us on

Date published: 8/18/2009

Most recent reader comments: