Dealers wait for money as clunkers program winds down

SANDUSKY Cash for Clunkers ends Monday, but local Ford dealer Bob Mathews didn't wait for the govern
Tom Jackson
May 24, 2010

SANDUSKY

Cash for Clunkers ends Monday, but local Ford dealer Bob Mathews didn't wait for the government to officially turn off the ignition.

Fed up with waiting for the government to pay him for the clunker deals he's made so far, Mathews suspended his participation in the program Wednesday.

"They have not paid us for a single deal," he said. "We were notified we were going to be paid on one, but it's been two weeks now. So it's a mess."

The dealership made or is completing close to 60 deals under the program, which provides a $3,500 or $4,500 payment when customers trade in a qualified "clunker" for a car that gets better gas mileage.

The dealership is owed "well over $200,000."

"We'll get it. It's just going to take awhile," he said. "It's a typical government program. We expected it to be slow, but not this slow."

Mathews said he suspended the program because he's afraid that if he keeps making deals, he won't get paid for some of them.

The Ohio Association of Auto Dealers released an update Thursday advising members it's not clear how much of the $3 billion allocated for the program remains in the government's coffers.

It urged members to "consider the risk" of keeping the program going.

"I don't feel like being at risk for that amount of money," Mathews said.

Charles Cyrill, spokesman for the National Association of Auto Dealers, said that as of Thursday, the National Highway Traffic Safety Administration was reporting 457,476 claims have been submitted by dealers, worth a value of $1.91 billion. But it's also known there's a "huge backlog of deals still waiting to be entered into the system," Cyrill said.

Bryan Kasper, owner of the Kasper family of dealerships, said Cash for Clunkers has been one of the best things to happen to the auto industry in a long time. But from the standpoint of cash flow, it's been one of the worst things, too.

Kasper said his dealerships have made "clunker" deals for more than 100 cars and is awaiting payment.

"I got paid for four clunkers this morning," he said, adding it was the first time he had been paid since the program started.

Kasper said as of Thursday, he also was considering whether to suspend the program before the government's official end date.

"We just had a meeting," he said. "All of our general managers sat down and tried to figure out what made the most sense."

While the government has promised to pay for all deals that are made during the life of the program, the Ohio Auto Dealers Association says there is a risk the program will run out of money.

"If they don't have the money, they're not going to pay for it," Kasper said. "It's kind of a Catch-22."

Dealers across the country have run into the same problems as Erie County dealers in getting paid.

"It's not an isolated incident in Sandusky," Cyrill said.