Cash for Clunkers
- Thread starter mikeyb
- Start date
On top of that, just think what this is going to do to the auto parts industry. The majority of the parts sold now are for mid 90s cars and trucks. If you take these cars off the streets then there is no need for parts. Now parts stores will have more parts sitting on their selves. This program is going to hurt alot of people.
'Cash for clunkers' is administrative nightmare
At Central Avenue Nissan in Yonkers, N.Y., they love "cash for clunkers."
At Downtown Ford Lincoln Mercury in Canton, Ohio, they love it, too. Lots of cash deals; few cases of bad credit; gross profit per vehicle up "a couple of hundred dollars."
At the Grand Blanc-based Serra Automotive Group, with 38 franchises at 21 locations in six states, the boss appreciates that the controversial federal incentive program has consumers thinking cars after a year of mostly doing anything but.
Sales are booming. Inventory is thin. Customers are swarming showrooms, hungry for sweet, stackable deals (cash back from the automakers plus a cash-for-clunkers rebate of as much as $4,500) that can cut the price of some eligible vehicles in half.
All good, except for one thing: Many dealers still aren't getting paid. The bureaucratic maze is ridiculous: 156 pages of regulations governing 13 pages of forms are mated to a computer system that mostly is failing to accommodate demand from dealers across the country.
Brad Black, general manager of Downtown Ford, told me Monday his dealership has delivered 73 vehicles under the federal program but has received reimbursement for just one car.
"We've got a lot of money hanging out there," he says, "a lot" being roughly $330,000. "Every time you sell a car you reach into your pocket for $3,500 or $4,500. That's a lot of money and it comes right out of working capital."
Not that they'd understand such a simple business principle -- cash flow is the lifeblood of small businesses like car dealers -- in Congress or the Department of Transportation. Which is the problem, whatever your philosophical take on the simple fact that public money is being used to spur sales for a (mostly) private industry and its dealers.
"We've gotten paid nothing at this point, absolutely nothing," says Jonathan Grant, principal of Central Avenue Nissan, Central Avenue Chrysler Jeep and two other dealerships in Westchester County north of New York City. Altogether, Grant has about $800,000 on the line.
"It's blind faith at this point that we're going to get the money. We're trying to input stuff today and they can't get in. The computers are overwhelmed. It's a great program for the manufacturers, a great program for the consumers. For dealers, it's been an administrative nightmare."
And the Obama administration and its allies in Congress propose to overhaul (and potentially run) health care for more than 300 million Americans? Let's just say cash-for-clunkers doesn't inspire much confidence in Washington's bureaucratic acumen. Or its speed. Or its feel for a functioning market, the demands and expectations.
Serra Automotive has booked 650 cash-for-clunker deals, but as of Monday morning only 8 percent -- about 50 vehicles -- had been approved for payment by the government, says Joe Serra, president of Serra Automotive. Meaning he's taking a $2.6 million cash hit while his customers already are driving their new vehicles.
"If that doesn't happen, we've got issues," he says. "That will crumble me. We just don't have that kind of cash lying around these businesses, especially after the year we just went through."
Will the dealers get paid? Probably, because failure to do so would be a PR disaster of epic proportions. Will the program prove to be the jumpstart languishing auto sales need? Debatable, though depleted inventories already are forcing increased production schedules across the industry.
The more important question, it seems to me, is what the obvious administrative failures of cash for clunkers say about the federal government's capability to manage programs more typically run by the private sector. And, secondly, why is there a clamor for more of the same?
Auto dealers are in business to make money selling cars and trucks, not to serve as conduits for federal transfer payments. If nothing else, cash for clunkers proved Americans still love good deals -- and that their government cannot process them.
At Central Avenue Nissan in Yonkers, N.Y., they love "cash for clunkers."
At Downtown Ford Lincoln Mercury in Canton, Ohio, they love it, too. Lots of cash deals; few cases of bad credit; gross profit per vehicle up "a couple of hundred dollars."
At the Grand Blanc-based Serra Automotive Group, with 38 franchises at 21 locations in six states, the boss appreciates that the controversial federal incentive program has consumers thinking cars after a year of mostly doing anything but.
Sales are booming. Inventory is thin. Customers are swarming showrooms, hungry for sweet, stackable deals (cash back from the automakers plus a cash-for-clunkers rebate of as much as $4,500) that can cut the price of some eligible vehicles in half.
All good, except for one thing: Many dealers still aren't getting paid. The bureaucratic maze is ridiculous: 156 pages of regulations governing 13 pages of forms are mated to a computer system that mostly is failing to accommodate demand from dealers across the country.
Brad Black, general manager of Downtown Ford, told me Monday his dealership has delivered 73 vehicles under the federal program but has received reimbursement for just one car.
"We've got a lot of money hanging out there," he says, "a lot" being roughly $330,000. "Every time you sell a car you reach into your pocket for $3,500 or $4,500. That's a lot of money and it comes right out of working capital."
Not that they'd understand such a simple business principle -- cash flow is the lifeblood of small businesses like car dealers -- in Congress or the Department of Transportation. Which is the problem, whatever your philosophical take on the simple fact that public money is being used to spur sales for a (mostly) private industry and its dealers.
"We've gotten paid nothing at this point, absolutely nothing," says Jonathan Grant, principal of Central Avenue Nissan, Central Avenue Chrysler Jeep and two other dealerships in Westchester County north of New York City. Altogether, Grant has about $800,000 on the line.
"It's blind faith at this point that we're going to get the money. We're trying to input stuff today and they can't get in. The computers are overwhelmed. It's a great program for the manufacturers, a great program for the consumers. For dealers, it's been an administrative nightmare."
And the Obama administration and its allies in Congress propose to overhaul (and potentially run) health care for more than 300 million Americans? Let's just say cash-for-clunkers doesn't inspire much confidence in Washington's bureaucratic acumen. Or its speed. Or its feel for a functioning market, the demands and expectations.
Serra Automotive has booked 650 cash-for-clunker deals, but as of Monday morning only 8 percent -- about 50 vehicles -- had been approved for payment by the government, says Joe Serra, president of Serra Automotive. Meaning he's taking a $2.6 million cash hit while his customers already are driving their new vehicles.
"If that doesn't happen, we've got issues," he says. "That will crumble me. We just don't have that kind of cash lying around these businesses, especially after the year we just went through."
Will the dealers get paid? Probably, because failure to do so would be a PR disaster of epic proportions. Will the program prove to be the jumpstart languishing auto sales need? Debatable, though depleted inventories already are forcing increased production schedules across the industry.
The more important question, it seems to me, is what the obvious administrative failures of cash for clunkers say about the federal government's capability to manage programs more typically run by the private sector. And, secondly, why is there a clamor for more of the same?
Auto dealers are in business to make money selling cars and trucks, not to serve as conduits for federal transfer payments. If nothing else, cash for clunkers proved Americans still love good deals -- and that their government cannot process them.
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- 03.5 YLW MSP
wow i knew it was bad but not that bad.
MAZDA_SPEED
Member
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- BLACK MSP
Wow!!! X2
government at its finest right there...
i listen to 700wlw everyday at work and they had a dealer owner on (chevrolet) and he said he sold something like 368 cars under this cash for clunkers program and hes been paid for just under 20 of them.
Why wont govt just go out and hang themselves in hotel closets...
i listen to 700wlw everyday at work and they had a dealer owner on (chevrolet) and he said he sold something like 368 cars under this cash for clunkers program and hes been paid for just under 20 of them.
Why wont govt just go out and hang themselves in hotel closets...
MazdaSpeeder
Member
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- Protege5 (5-spd)
This is awful. I hope we don't have dealers getting their bottom line seriously hurt by the end of this thing. I think the note in the article is right...do we really want a government that can't run a simple reimbursement plan well controlling our healthcare?(strike)
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- 2016 GT ST 47A
Ding Ding Ding.....I am thinking the same thing. Also waiting to see what happens with the USPS. Supposedly they will run out of money next month????
Buyers Feel Regret as Cash for Clunkers Final Tally Is Released
WASHINGTON The Cash for Clunkers buzz is starting to wear off and it seems that some buyers are having serious second thoughts about getting on that government-funded bandwagon, according to a new survey. In the meantime, the U.S. Department of Transportation said that dealers by Tuesday's deadline had submitted a final total of 690,114 Cash for Clunkers deals for $2.88 billion in rebates.
The total is just under the revised $3-billion budget for the four-week program.
The new survey by CNW Purchase Path, of Bandon, Oregon, finds that of nearly 1,000 Cash for Clunkers participants, 17 percent say they have some or serious doubts that they should have made the new-vehicle acquisition.
"Primary reason: They are now facing a $275-$350-per-month car payment that didn't exist prior to acquiring the car or truck," said the report. "That amount, they say, could negatively impact the total family budget more than expected prior to buying the new vehicle."
In contrast, buyers' remorse hits about 6-8 percent of new-vehicle buyers within a month, said CNW Purchase Path.
Inside Line says: You might not feel so good after you remove that Cash for Clunkers party hat. Anita Lienert, Correspondent
WASHINGTON The Cash for Clunkers buzz is starting to wear off and it seems that some buyers are having serious second thoughts about getting on that government-funded bandwagon, according to a new survey. In the meantime, the U.S. Department of Transportation said that dealers by Tuesday's deadline had submitted a final total of 690,114 Cash for Clunkers deals for $2.88 billion in rebates.
The total is just under the revised $3-billion budget for the four-week program.
The new survey by CNW Purchase Path, of Bandon, Oregon, finds that of nearly 1,000 Cash for Clunkers participants, 17 percent say they have some or serious doubts that they should have made the new-vehicle acquisition.
"Primary reason: They are now facing a $275-$350-per-month car payment that didn't exist prior to acquiring the car or truck," said the report. "That amount, they say, could negatively impact the total family budget more than expected prior to buying the new vehicle."
In contrast, buyers' remorse hits about 6-8 percent of new-vehicle buyers within a month, said CNW Purchase Path.
Inside Line says: You might not feel so good after you remove that Cash for Clunkers party hat. Anita Lienert, Correspondent
Wow. And just when I had built up a shred of hope for us. Em 'r purdy smawrt. Good job on your taxpayer (partially) funded purchases....
A report from NPR says the reason dealerships aren't getting their rebates is that they're not filling out the forms correctly... I'll see if I can find the actual report. I'm sure it's just a way to spin it to make it look like it's not the government's fault.
That's part of the reason. According to Jenn, some are refusing to destroy the customer car until their payment is approved--crazy idea, I know.
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- '13 CWP MS3 & '16 Mazda6 GT
What do you mean I have to pay for the car? I thought I got to trade in my clunker for a new car for freeeeeeeeeeeeeee!
Yeah, they've been crashing all the time. They've extended the deadline to get the deals in indefinitely because nobody can get them submitted because the computer system blows.
