Car dealers waiting for money from government
EUGENE, Ore. -- The Cash for Clunkers program practically has cars driving themselves off lots.
It has been a huge success at Sheppard Auto in Eugene.
“So far the program has really worked well for us,” said Phil Speers, one of Sheppard's owners. "We have not experienced any problems.
"However," he added, "we haven’t been paid.”
If you remember: the program works because the government offers consumers a roughly $4,500 dollar rebate.
So every clunker a dealership takes in puts them in the red until the government reimburses them.
“What you have is hundreds of thousands of dollars sitting out there waiting for the government to pay,” Speers said.
Sheppard Auto has yet to see any cash.
"I'm not concerned,” Speers said. “I think we will get paid, it's just going to take longer than we anticipated."
That is fine for big dealerships like Sheppard Motors and Kendall Auto.
Kendall’s CEO said they have been paid for 84 of their clunkers, but they have sold about 600.
For smaller dealerships, keeping up with this could be trouble.
“A small dealership would have a tough time continuing with this,” said Jeff Shutt, the general manager of Nissan Lithia in Eugene.
They are doing alright despite not getting reimbursed for all their clunkers, but there are rumors in the industry that some small dealerships may have to discontinue the program if they don’t see some cash fast.
In response to this, the Obama administration is now tripling the number of workers processing Cash for Clunkers transactions. The Department of Transportation plans to have 1,100 workers processing rebates by the end of the week. That’s up from 350 workers it had doing the job last week.
