On the other hand, these same dealers told these same reporters that they were concerned over whether or not the government would actually reimburse them for the discounts they gave customers. These dealers claim that they gave discounts to customers who traded in their supposed junk heaps for a big chunk of change -- between $3,500 and $4,500 -- toward the purchase of new cars and trucks.
Needless to say, the $1 billion dollars allocated for the program has already been depleted, according to new reports. Reacting to the positive reaction of the auto industry, dealers and customers, there is the promise of another billion being allocated.
Not all political leaders are enthusiastic with this government giveaway. For example, Congressman Pete Hoekstra (R-MI) believes all the hoopla over the "cash for clunkers" could be premature.
On Friday, Rep. Hoekstra heavily criticized the bureaucracy managing the "cash for clunkers" program.
"The red tape involved in ‘Cash for Clunkers’ is creating a major backlog in providing rebates to dealers and causing used cars to pile up," Hoekstra said. "If the government cannot manage a $1 billion automobile program, how can we expect it to manage a $1.5 trillion health care program?"
Hoestra's remarks followed the House's voting to include an additional $2 billion for the original $1 billion program. Much of the money has been committed, but the government has failed to pay out a vast majority of it because of the bureaucracy involved. Examples include the 21-page paperwork process, one hour to complete one form and rejections on claims for no apparent reason. The customers drive off the lot with their new vehicles while the dealers get the shaft.
"The program needs major improvement for it to work effectively," Hoekstra said. "Cash for clunkers looks good on paper, but its delivery has so far been a disaster for dealerships."
Other questions that remain unanswered includes: What happens when a customer cannot keep up his or her car payments and the monthly insurance premiums that may total $1000 per month or more. Owners of clunkers usually own them because they cannot afford to purchase, insure and maintain expensive vehicles.
Why aren't the news media asking the lawmakers and Obama such questions instead of worrying about how much more taxpayers' money they can give away?