With the House pushing for another 2 billion to be injected into the cash-for-clunkers program, auto dealers have found themselves in a sticky situation.
Many dealerships are offering their customers the full $4,500 discount despite uncertainty about when or even if they'll be reimbursed by the government. This uncertainty stems from not only the grim news about the solvency of the program, but unnerving frustrations over the logistics of the reimbursement system.
"Once you get through the process of submitting one [reimbursement request], there's no way to know if they've got everything they needed. So we've to yet to see," said Bill Dowen, General Manager for Stevenson Toyota in Jacksonville, NC. "I think we assume that we will get reimbursed, but also we do it with knowing that there is some liability involved.”
Stevenson has only experienced about a 5% increase in sales. But other dealerships, such as Medlin Hyundai in Rocky Mount, NC, have doubled their business, making General Sales Manager William Witmire mostly happy.
“We love it. It's just been a good motivator for our sales people. It’s just nice to see people back out on the lot again to be honest with you,” he said. But when asked about his prospects for reimbursement, he was hesitant.
"We hope so, because we've got about 70 grand hanging out there."
Money for the program ran out just 7 days after it was instated, and the House immediately passed another 2 billion to try and save the program. Sen. John McCain has vowed to filibuster the proposal, telling Fox News “I not only wouldn't vote for the extra two billion, I was opposed to the initial billion.”
A survey of about two dozen dealerships across the U.S. revealed that most were highly concerned about the process for getting payment from the government, and moderately concerned about the possibility that the government wouldn’t pay them back at all.
“We're up, 30 percent,” said Taft Hefner, sales manager for Family Hyundai in Walton, VA. Family Hyundai was in the process of filing the paperwork for the vehicles it has sold, but had not heard anything back from the government.
“It’s a pretty big deal. It’s a difficult thing,” said Hefner.
Many of the dealerships who were contacted were simply too busy to respond to any press inquiries, a direct result of increased business from the cash-for-clunkers program.