Reimbursements from the government for the Cash for Clunkers program have started to pick up some, but according to Mark Scarff, president and General Manager of Bowen Scarff Ford Lincoln Mercury, his dealership hasn’t received all the federal payments yet.
Scarff said the federal government has informed dealers that they have doubled the staff working on the program and hope to have all payments made by Sept. 30.
So far, Scarff said Tuesday his dealership has been paid for 52 of the 67 Cash for Clunkers deals it made while the program was in operation, including 24 payments which arrived Monday.
One of the most popular of the federal government’s stimulus programs, Cash for Clunkers encouraged drivers to turn in large gas guzzlers in favor of fuel-efficient cars in exchange for a credit of between $3,500 and $4,500.
The program, however, required dealers to front the credit money and await repayment from the government, which has been slower than expected.
Scarff estimated that his dealership was at one time awaiting more than $285,000 from the government, though as of this week he said there was only about $64,000 outstanding.
For many dealerships, the delay in receiving reimbursement from the government could have cost them a chance to re-stock their lots or pay for operations and salary, though Scarff said Bowen Scarff was fortunate to have a larger supply of working capital.
In all, Scarff said he considered the program a success because it brought out many buyers who might not otherwise have purchased a car, though there is some worry that there will be a “clunker hangover” this fall because anyone looking to buy took advantage of the program this summer.
Scarff, however, said he was not particularly worried because of the “unique” nature of the Clunkers buyers.
Scarff also said he thought the program was an excellent stimulus, probably pulling in twice as much in sales tax as it laid out in rebates. However, in the future, he’d hope any similar programs had a little better planning.
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