Dealer Inventories, Cash Low as Clunker Program Ends

FORT WORTH -- Auto dealer Cliff Johnson sold 70 vehicles under the government's "cash-for-clunkers" program, which offered rebates of up to $4,500 to trade in older gas guzzlers. But the day after the program ended he's only been paid for two and he's worried about how quickly the government will reimburse him over a quarter of a million dollars and whether it will pay fully. "They owe us $279,000, that's the bottom line. We did 70 deals and we've been paid on two," said Johnson, president of Texas Motors Ford. "My people have been paid, my sales people have been paid ... and all I'm left with is a piece of paper from the federal government saying that it is under review," he said as he waved a folder with the details of the deals. Transportation Secretary Ray LaHood assured dealers last week they would be paid. "I know dealers are frustrated. They're going to get their money," he said. But this shot in the arm has left some dealers anxious about cash flow at a time when inventories are low -- in part because of the program's success. Chuck Eddy, an owner of Bob and Chuck Eddy Chrysler-Dodge-Jeep in Youngstown, Ohio, said on Monday he had not received payment on any of nearly 100 "clunker" deals he had completed, but was confident he would be reimbursed. "They are going to pay us," Eddy said. "They never anticipated, nor did they understand what goes on inside a dealership."
Source: Reuters