US Assures Dealers They'll Get Their Money

In a response to the growing discontent to the way in which the reimbursement process for the Car Allowance Rebate System moves, US President Barack Obama's administration stepped in and tried to put dealers' concerns at rest.

"The US needs to move the system forward and they need to start paying these dealers," Mark Schienberg, Greater New York Automobile Dealers Association president said at a meeting with Transportation Department officials."This is a cash-dependent business."

According to US transportation Secretary Ray LaHood, the dealers will be reimbursed, but he doesn't mention when. "I know dealers are frustrated. They're going to get their money," LaHood was quoted as saying by AP. He continued by confirming NADA's assessment of the program running low on cash.

"We want to make sure that dealers know when we're getting close to running out of the money that we have been allocated," LaHood said.

Additionally, the Secretary announced the administration is looking into how to wind down the program as it nears completion. The administration will announce on Friday, LaHood said, how it intends to discontinue the incentive.

So far, the slow moving reimbursement program made some of the dealers get out of the CARS program. According to a survey conducted by Automotive News, 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 sad reality was confirmed by Mark Schienberg, who said that about 2 percent of the dealers with the Greater New York Automobile Dealers Association have been paid for the cash for clunkers deals they have made so far.