Dealers stiffed as clunkers pile up

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Dealers stiffed as

clunkers pile up

Updated: Thursday, 20 Aug 2009, 12:47 AM MDT
Published : Thursday, 20 Aug 2009, 12:35 AM MDT

ALBUQUERQUE (KRQE) – Some New Mexico auto dealers have backed out of the cash-for-clunkers program and more may do so as the federal government takes its time providing cash reimbursements.

Dealers across the state are owed more than $3.6 million, according to a dealers’ group which says that so far Uncle Sam has only written three checks totaling about $14,000.

Cash for clunkers–officially its the Car Allowance Rebate System–allows consumers to trade their gas guzzlers for a more fuel-efficient rides while earning up to $4,500 toward the purchase price.

Dealerships put up the cash for the rebates after being told by the Obama administration they would be paid back within 10 days of the sale.

With that much cash in limbo they’ve called in reinforcements.

“You simply can’t ask businesses to front $200,000, $300,000 for any period of time,” Rep. Martin Heinrich, D-N.M., told KRQE News 13. “These applications are simply not being processed fast enough.

“So we are going to be on the phone today to the White House and to the feds in DC to try and get this moving.”

Don Chalmers’ dealership received the most reimbursement so far.

“I pay my bills,” Chalmers said. “If I was three weeks or four weeks late on paying my taxes I suspect that they would be in my office real quick.

“We just expect the same sort of courtesy and treatment from the federal government.”

Chalmers said his dealership has sold about 70 cars under the clunkers program.

Lawton Davis’ dealership has had more than 60 cars driven off the lot because of the incentive. But the go-green event has left him with no green from the government.

”I’m a little frustrated by it, and we have had to make adjustments in our business plan to accommodate it.” Davis said.

While those dealerships will survive the wait, others said they can’t afford to keep putting up cash.

“These are substantial dollars of money when you break it out into the individual dealership,” Charles Hensen with the New Mexico Automotive Dealers Association said. “The impact on a small dealership is a hard thing to overcome especially when you are dealing with the cash flow.”

”They need to get these applications paid for in the next week,” Heinrich said. “This has gone on to long.” Heinrich said.

So far more than 650 cars have been traded in through the program statewide. The incentive is expected to end Nov. 1 or whenever federal money for the program runs out.

The U.S. Department of Transportation is handling the money. The agency has tripled the workforce assigned to the program to try and get more checks out to dealers quickly.

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