Dealers await reimbursements as Cash for Clunkers wraps up


POSTED: Friday, August 21, 2009

WASHINGTON » The Obama administration will end the popular $3 billion Cash for Clunkers program, giving car shoppers a few more days to take advantage of government incentives.

The Transportation Department said yesterday that the government will wind down the program Monday at 2 p.m. Hawaii time. Car buyers can receive rebates of $3,500 or $4,500 for trading in older vehicles for more fuel-efficient models.

The news was texted to a dealer during a board meeting of the Hawaii Automobile Dealers Association yesterday morning, said Dave Rolf, executive director.

By then, at least one dealer had already slammed the brakes on Cash for Clunkers deals. Servco Pacific Inc. issued a statement yesterday saying it suspended its participation following an announcement by the National Highway Traffic Safety Administration that funding for the program would be depleted by Monday.

“;We are disappointed that a number of pending transactions were not able to be finalized prior to termination of this federal program,”; said Rick Ching, Servco executive vice president.

“;We sincerely regret the government's decision to terminate this highly popular program.”;

Transportation Secretary Ray LaHood said the program has been “;a lifeline to the automobile industry, jump-starting a major sector of the economy and putting people back to work.”; He said the department was “;working toward an orderly wind-down of this very popular program.”;

The White House has touted the program's success in providing a targeted boost to the sluggish economy since its inception in late July. Through yesterday, auto dealers had made deals worth $1.9 billion, and incentives have generated more than 457,000 vehicle sales.

But the administration needed to put a halt to the program to avoid surpassing the $3 billion funding level. Consumers were on pace to exhaust the program's coffers in early September and dealers have complained about long delays in getting reimbursed for the car incentives.

Hawaii's largest dealer sold hundreds of vehicles under the program and has yet to receive a single reimbursement, Rolf said, after taking a tally from HADA board members. Dealerships belonging to HADA directors have sold 1,100 vehicles, likely far shy of the statewide tally, and only a handful received reimbursements for one or two deals.

Windward Dodge, Chrysler Jeep and Hyundai is continuing to sell cars under the program but also has not received reimbursement, said Don Mann, used car manager. It has submitted requests for 30 vehicles, for about $120,000 outstanding.

“;We need to get paid,”; he said.

The program definitely drove people into the dealership, “;but if we don't get paid, then no, it wasn't successful at all,”; Mann said.

The dealership's reimbursement submissions, which are voluminous online documents, keep getting rejected and kicked back, which is happening to many dealers, he said.

Star-Bulletin reporter Erika Engle contributed to this report.