Most Dealers Still Waiting for First CARS Payment

The immense success of the Car Allowance Rebate System appears to have manifested itself only on paper, as almost two thirds of the dealers participating in the program say they are still waiting to get reimbursed for the clunkers deals they have made. This means that over 60 percent of them are yet to receive any payment, with only 3 percent of the total deals made being paid for.

These result come after a non-scientific survey conducted by Automotive News and show some dealers are even afraid their businesses are put at risk by the slow-moving payment system.

"The lack of cash is killing us," one dealer said in the survey. "The lack of any kind of feedback from the government for the rebate applications is appalling."

"We stopped because we have only gotten two payments out of 120," another dealer said. "They keep rejecting for various reasons, and the process is entirely too slow."

The average amount of money owed by the US government to dealers participating in the survey is $128,000, with the highest claim going to as much as $5 million.

"As a dealer, I would just as soon this program had never been approved despite the sales," another dealer added. "It is a nightmare for all of us."

The nightmare may be soon over, as yesterday the National Automobile Dealers Association (NADA) announced it has requested the US government to freeze CARS until a correct assessment of the money left will be made. At the same time, NADA warned dealers they are at risk of not getting reimbursed.

"Dealers who accept additional 'clunker' deals face a growing risk that they may not be reimbursed," NADA said.