Careful what you wish for could be the lesson for auto dealers in the government's Cash for Clunkers program. The program has been highly successful moving new car inventory and bringing people into the showrooms. But it's also been a bureaucratic nightmare as dealers slog through paperwork and wait for the government to pay the millions for the clunkers on their lots.
Fairfax Hyundai President Sam Mansouri hired extra help to process the deals and has yet to get paid one dime from the government. He says he wishes just one claim will get paid, so he can use it as a model. He also worries about the deals that might be rejected. In the meantime, he's keeping the clunkers on back lots, which are usually reserved for new cars. His inventory of new cars is so small now, it's not a problem. He says he doesn't think the program will hurt sales down the road, but he's not sure.
Auto analyst Rebecca Lindland lowered her sales forecast for 2010 to account for about 150,000 sales that, if not for Cash for Clunkers, would likely have taken place next year. She now expects 11.1 million cars to be sold next year. And, she too worries about auto dealers getting paid, since they are not set up to loan money out to the government.
Comments
Bailouts, bailouts, and more bailouts! When the dealerships fail because the government doesn't pay them, then I assume the government will buy the dealerships. So we will have government owned car manufacturers and distribution systems? HMMMM, sounds like COMMUNISM to me!
I read today where over half of the New York City car dealers have taken themselves out of the Cash For Clunkers program. Collectively they're out millions of dollars and fear they might not get paid, or if they do, when. It's another government program that's great in theory but the practice hasn't been thought through. It has to really make you wonder what kind of a mess a government run health care option will be.
I THOUGHT THE CASH FOR CLUCKERS WAS A GOOD IDEA THE BAD PART IS YOU DO NOT KNOW WHEN THEY WILL RUN OUT OF MONEY AGAIN THE FACT THAT CAR DEALERS ARE BENIFITING FROM THIS IS FINE BUT IT WOULD HAVE BEEN BETTER IF THEY WOULD OF GAVE A REBATE TO TAX PAYERS AND WE COULD OF HELPED ALOT MORE INDUSTRIES LIKE AIRLINES NEED HELP TO AND CARS LOTS AND SHOPPING CENTERS AND ALL THEY WOULD HAVE TO DO IS GIVE OUR TAX DOLLARS BACK TO US!!! THEY SPENT MORE THAN THAT ON THE BANKS TO CLEAN THEM UP. WE COULD OF PUT MONEY BACK IN OUR BANKS AND SURE THEM UP TOOO.....!!!
I thought the Cash For Clunkers program was aimed at stimulating sales for the US' Big Three auto makers? I don't have a problem if a Hyundai dealer has to wait in line while Ford, GM and Chrysler dealers get paid first. Doesn't our government have more of an economic responsibility for people in Detroit than those in Seoul?