Roughly two-thirds of U.S. dealers are still waiting on their first check from the government’s cash for clunkers program, which has prompted General Motors to step in with some dealer aid. GM announced a new program on Thursday that will advance dealers a 30-day, interest free loan on current clunkers applications.
The backlog of clunkers applications has slowed federal payments to a trickle, leaving many dealerships with cash flow issues. In order to ensure dealerships can stay up and running, GM has announced it will float its dealers a 30-day loan to keep sales moving.
“Our sales performance in the past two months has exceeded our internal forecast by over 60,000 vehicles, largely driven by the CARS stimulus program,” said Mark LaNeve, VP of U.S. Sales. “We want to do all we can to provide customers with timely new vehicle deliveries and dealers the liquidity they need to run their businesses.”
GM will grant dealers a loan on any clunkers application, regardless of the application’s position in the approval process. If the dealer does not pay back the loan within 30-days, GM will deduct the loaned amount from the dealer’s open account with GM, according to Automotive News. GM will continue the program until the conclusion of the CARS program.
