Cash for Clunkers ends, dealers await payment - East Valley Tribune: News

Cash for Clunkers ends, dealers await payment

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Posted: Monday, August 24, 2009 6:05 pm | Updated: 1:40 am, Sat Oct 8, 2011.

With the Cash for Clunkers program over, East Valley auto dealers are turning their attention to restocking depleted inventories and obtaining long-awaited reimbursements promised by the federal government.

Of the 100 cars sold under the program at Berge Ford in Mesa, only three have been reimbursed, said Steve Countryman, general sales manager for the dealership at U.S. 60 and Mesa Drive.

While his dealership can afford to await payment - which totals about $500,000 - the government's sluggishness is a greater burden for smaller dealers.

"You're fronting that money," he said. "You've got to be a pretty sound dealer in order to have that kind of cash flow."

The Car Allowance Rebate System, the official name of the program designed to stimulate sales and cut the number of gas guzzlers on the road, ended at 8 p.m. Monday.

The program provided $3,500 and $4,500 rebates to customers trading in vehicles for more fuel-efficient ones.

But a myriad of problems surrounded the reimbursement process, including lengthy paperwork, confusion over who qualified, and problems with the Department of Transportation's Web site due to all of the traffic.

Still, Countryman said his employees submitted the last of their paperwork Tuesday afternoon.

"Now it's just a matter of when we're going to get paid," he said.

Tom Scheurn, general manager of Earnhardt Auto Center's San Tan Hyundai at Val Vista Drive and Loop 202 in Gilbert, said Monday he'd been reimbursed for only 10 percent of his Cash for Clunker deals.

"We are very concerned about getting our money back quicker," he said. "The original program was as soon as the paperwork was submitted they would guarantee a payment within - I think it was 10 days."

He said reimbursement for some deals has taken more than 30 days.

Another big challenge for dealerships is depleted inventory.

Countryman said it will be interesting to see what happens in the next 30 to 90 days as companies scramble to restock.

Since delivery volumes are decided on past sales, restocking could be a lengthy process for Valley dealerships, which have been hit harder than their counterparts in other areas of the country due to Arizona's particularly poor economy.

Bobbi Sparrow, president of the Arizona Automobile Dealers Association, said the month-and-a-half program met its intended goal. Still, it's too early to measure its full impact or to know how far away a full recovery is for the industry.

"I think it definitely got the pent-up buyer back on the street, and I think it kind of changed everyone's attitudes," she said.

Countryman chalks up Cash for Clunkers as a great success, but he said the industry's problems are too great for any one quick fix. Ultimately, only a recovery in the housing market and a full return of consumer confidence will precede a turnaround, he said.

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