The government’s cash for clunkers program has been dominating the headlines for the past few weeks, but the latest news on the CARS program isn’t exactly positive. The U.S. Department of Transportation is reportedly breaking the cash for clunkers law, taking longer than the required 10-days to pay dealers rebates.
Under the cash for clunkers law, the U.S. Department of Transportation is required to pay dealers rebates within 10-days of approving a clunkers application. However, several dealers say they have yet to be paid, some with millions hanging in the balance.
“I’ve never experienced anxiety like this in business before,” Brad Wood, a Kia , Chrysler and Honda dealer, told Automotive News. “If I don’t get paid, I will have been working almost free for several months.” Wood has $319,000 in outstanding clunkers claims, $47,000 of which is at least three-days past due.
The Department of Transportation acknowledges the cash for clunkers’ rebate Web site had several bugs out of the gate, but claims almost all of the glitches have been addressed. “We fixed our Web site problems,” LaHood Transportation Secretary Ray LaHood said. “We believe processing will go much smoother.” Payments to dealers began August 4th, but the computer problems backed up several of the claims.
Many dealers are also complaining about minor mistakes holding up CARS payments. The smallest error on the clunkers application can delay payment, with no Department of Transportation employees available by phone or email to resolve the issues.
The cash for clunkers program is expected to run through Labor Day – thanks to a $2 billion extension – but many dealers are still worried the funds could run out before they get their cash.
