Dealers cashing in at last

Posted 9/29/09

Clunker cash began flowing to dealers in early September. Auto dealers across the country reported that payments on the massive program were slow. …

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Dealers cashing in at last

Posted

Clunker cash began flowing to dealers in early September.

Auto dealers across the country reported that payments on the massive program were slow.

McDonald Auto Group in Littleton floated close to $250,000 before reimbursement money started arriving.

Michael McDonald, vice president of McDonald Auto Group, mentioned the lack of Car Allowance Rebate System payments to Rep. Mike Coffman, R-Aurora, during an August break visit to one of the dealerships.

Coffman said he would address the issue as soon as possible.

In August, the engine disabling requirement was changed to allow dealers to keep the vehicle running until payment was received, and allowed seven days for the dealership to disable the car by pouring silica into the engines.

McDonald had disabled all the cars in the program prior to receiving payment.

“We have received 90 percent of our money,” McDonald said Sept. 25.

He expects the rest to come in before October.

“We are confident we will receive all of the remaining money,” he added.

Cash for Clunkers poured $3 billion into the automotive buying market from late July to late August.

Colorado dealers requested $37.1 million in reimbursements.

US. Transportation Secretary Ray LaHood called the program a success.

“There can be no doubt that this program drummed up more business, for more people, in more places at a time when our economy needed help the most,” LaHood said.

Auto sales saw a 10.6 percent increase in August over July, leading retail sales overall in the nation to a 2.7 percent increase in August from July.

Dealers nationwide submitted paperwork for 690,144 rebates under the program.

But now that the program is out of money two months before the original expiration date of November, what happens to sales of new vehicles?

“The industry is definitely feeling a hangover,” McDonald said. “We stole demand from this month and probably some from October.”

Supplies are low as auto makers struggle to increase inventories.

“We do have more orders than normal for cars in November and December,” McDonald said.

The most popular car bought under the program, which held mileage requirements, was the Toyota Corrolla.

Japanese auto makers netted 41 percent of the sales under the program. The top four cars under the program are built in the United States.

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