Car Dealers Waiting for Clunkers Money

Since Cash for Clunkers was launched last month it's been seen as a big success.

"We've delivered over 100 cars under the program," said dealer Matt Luzio.

But it's been a complicated process. Luzio's Flemington, N.J. dealership has only gotten a federal refund for just one of 103 he's sold.

"It amounts to about a half a million dollars outstanding right now," Luzio said.

While consumers get a discount when they trade in their clunkers, the cash from the rebates goes to the dealer - as much as $4,500 dollars for each car. And if the government rejects the application, it's the dealer who is on the hook. So Luzio is holding on to the clunkers in case he needs to sell them like he would any trade-in, reports CBS News correspondent Terrell Brown.

Now, clunkers are piling up, costing him an extra $2,500 a month to store them on a separate lot.

"We are worried if the approval process isn't sped up, we'll have to secure more space to store clunkers," Luzio said.

But new car buyers are still coming in taking new cars off the lot and leaving their clunkers behind. And the car usually ends up in a place like an auto recycler's junkyard. But even when the car gets here, there's another issue.

Jerry Cerullo oversees Stadium Auto Wreckers.

"If anyone thinks this is profitable for yards like us, they are 100 percent wrong," Cerullo said.

He was expecting to make some money on about 30 clunkers this week, but says the dealer delays are hurting his business as well.

"I got a call Monday morning saying, 'Listen, we're not ready to do this, we're going to wait until we get paid,'" Cerullo said.

The government is adding staff - some 1,000 new positions. Luzio hopes that will finally speed up the refunds.

"I'm sure the process will get better," Luzio said. "We just need it to get better fast."

Before patience and space runs out.

[govmess]

America keep the pressure on at town hall meetings...cite the vaccine debacle as just another example of poorly planned, poorly thought out Obama program...it would hav been wise for his whiz kids to check with the manufacturers of the vaccine before he said he would have 120 million doses available by October.

We also have another taste of what a government run Health Care Program will be like with the Cash For Clunkers program....Read what the Milwaukee Sentinel says about the government run Cash for Clunkers program:
"The Cash for Clunkers program has been nothing short of an administrative nightmare. This program has been nothing short of a processing joke as it began late, crashed computers, web site was difficult to follow and ran out of money before the program started.

Now we learn that dealerships are not being paid by the government. Imagine that. A government run program that was first under funded and now appears to be under staffed to process the paper work for the Clunkers program".

Obama promised the dealers would receive their checks in 10 days....for most three weeks has gone by and they are NOT getting their checks. Any government program is an abomination but this one will be the biggest disaster based upon how this Administration delivers their programs. They are all intellectual academics who have no idea what the real world is all about.

[sjc_1]

I don't see how you make the leap from a short term once off program like this and an on going program like the public option and Medicare. That is not logic, it is idiocy. The dealers should be paid their money, but the description of cars that qualified was quite detailed. The dealers could have said no deal, but went for it anyway, no one was forcing them to. In business, you take your chances. If they followed the guidelines they have nothing to worry about, those trying to commit fraud will be dealt with.

[STBY21]

Cash For Clunkers, the Postal Service, Medicare & Medicaid, the IRS...all things that are well-run by the government. Should we make everyone's healthcare the same? They can't even run a five-month program. How do we (better yet, why would we) expect them to run one sixth of our entire economy? There are hospitals already laying off employees waiting for Medicare/Medicaid reimbursement.

I am glad this has boosted auto sales for the quarter, but if you gave $4500 to everyone who bought a boat wouldn't boat sales go up too? This is just an opportunity to pay back the auto unions and screw the dealers a second time. This really isn't about recovery. If it were, the government would put the money back into the hands of the small businesses that provide around 70% of the jobs in our economy. Instead we are bailing out large business and unions.

To end on a positive note though...Obama is finally creating 1000 jobs.

[govmess]

Yeah...and half of the 1000 jobs are czars reporting in to him

[debinok1]

This isn't just Obamas mess, it is the GOVERNMENTS mess, Democrats and Republicans both created it and allowed it to get so far out of hand. Neither party has any interest in regulating the industries that have screwed america. Neither party is going to risk their own cash flow or the cash flow of their campaign funds. Both parties will continue to support the insanity that put america in this position, with no thought or concern for the american people who suffer because of it.

Time to RECALL them all and start over.
http://www.thepetitionsite.com/1/are-we-confident-our-government-is-working-for-us

[grabandgo]

Really good, the government can't even manage this and they want to mansage our healthcare. So how many thousand more will they have to hire for healthcare. Our junior senator with 143 days experience is getting everything all wrong.

[timextwo]

As far as the "cash for clunker" bit, both of mine are exempt. One being considered a class 3 heavy truck,(9,000 lb GVW), the other one getting 35-38 mpg hiway, better than the mileage of the new ones. And after being laid-off, I couldn't afford to anyway.
As far as healthcare. The government can never get their act together, so why should they meddle in something they have no idea how to run.
Furthermore, the government cares less about the working class American, but worry about the banks and fortune 500 companies. Proof is in the pudding. You see it everyday in the news. The working class can suck on a bone while the big bankers get massive bonuses. The government went bass-akwards. The government needs to be reined in.

[wilbursandersjr]

Nicely said ecology, nicely said.

[RobynRoberts100]

I believe the Cash for Clunkers program will be around for a long time. The parameters will change to be a ratio refund according to how many MPG's you improve your mileage on your new or even used vehicle purchase. Hence the hiring of 1,000 more staff.

I've put together some good resources, if you're interested in the Cash for Clunkers Program.
http://www.autostimulusplan.org

[Bastion_Of_Balance]

The EPA already changed the standards. So I guess my car manual is wrong and what they say has to be true, huh? The cash for clunkers is a joke... a bad one at that.

Sorry, I don't want a smart car. How smart am I going to look smashed to smithereens if I got hit? And the idea of sitting on all those batteries has me very weary. Not to mention the fact of how expensive thewy are to replace.

I'll keep my 97 8cyl truck ANYDAY!

[ecoology]

Let's get this straight. The government can't issue rebate checks for a program they devised [cash for clunkers], and now they want me to accept life and death health decisions about my life [healthcare reform].
Obama, get this clear and straight - keep your socialistic hands away from my car AND my health care. If I want your brand of government, I'll move to Kenya - you know the place.

[rdepontb]

For decades, the auto dealers have been playing delaying games with buyers, trying to get them to pay top price for average cars. Buyers often had to wait for information, rebates, ownership documents, etc., etc. Maybe this wait-and-see act on the government's part will humble the dealers just a little. Likely not, but let's hope so.