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Some car dealers here feel skunked by Cash for Clunkers

Written on August 26, 2009

Many St. Louis auto dealers pulled the plug on "Cash for Clunkers" even before Monday’s deadline because of depleted vehicle inventories and ongoing delays in receiving their federal payments.

Processing delays have dogged the Car Allowance Rebate System, or CARS, from the very start, when the U.S. Department of Transportation failed to have enough employees to field all the rebate claims. While the government has added staff, only a fraction of the claims have been paid.

Federal transportation officials said the computer system handling the claims was temporarily shut down Monday because of heavy demand. While Cash for Clunker sales ended Monday, car dealers now have until midday today to file reimbursement paperwork for rebates worth up to $4,500 apiece.

"We’re thrilled by this," said Libby Krum, a spokeswoman for the American International Automobile Dealers Association, or AIADA. "These few extra hours could make the difference between a truly successful stimulus program and a complete disaster."

Through Monday morning, the Department of Transportation said U.S. auto dealers had turned in 635,186 transactions with rebate claims valued at more than $2.6 billion.

Transportation Secretary Ray LaHood said last week that not all of the delays in repaying the dealers are the federal government’s fault. He said some of the applications that have been turned in were filled out incorrectly and had to be sent back to the auto dealers who submitted them.

Many local dealers stopped making the clunker deals over the weekend — or even earlier.

"We’re not doing any fresh clunker deals because there’s too much at stake," said Jack Gonzales, general manager at Jim Trenary Chevrolet in O’Fallon, Mo. "They owe us so much right now."

The dealership has been reimbursed for two of the nearly 100 sales involving clunker rebates, Gonzales said. The Jim Trenary dealerships in Troy, O’Fallon and Union were "mobbed all weekend" with last-minute buyers seeking clunker deals.

Likewise, Dave Sinclair Ford in south St. Louis County stopped making clunker deals on Saturday so the dealership would have time to file claims, said Dan Sinclair, dealership vice president. Sinclair said there was a "fairly good stream" of people shopping for new and used vehicles on Saturday.

The four Sinclair dealerships have done about 205 to 210 clunker deals, he said.

Clunkers promised rebates up to $4,500 to consumers who traded their qualifying gas guzzlers for more fuel efficient cars. It formally ended Monday night.

Lou Fusz Jr., president and CEO of the Lou Fusz Automotive Network, said some of his dealerships were still making sales involving clunkers on Monday, despite the government’s computer meltdown.

"It certainly motivated the market," said Fusz, who added the Fusz dealerships did several hundred clunker deals. "It could have been designed a lot more user-friendly."

But AIADA’s Krum said it was "pretty impressive" that the government was able to get the popular program up and running so quickly this summer.

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