The Virginia Automobile Dealers Association (VADA) reported yesterday that it heard on a call with the National Highway Transportation Safety Administration (NHTSA) that in the “Cash for Clunkers” program 80% of transactions are being rejected.

Those rejections are in the voucher applications submitted by auto dealers to claim the cash offered when a customer buys a more gas-efficient new vehicle and surrenders his old guzzler for a “cash voucher.”

We know that, initially, some of that was due to omissions by dealers rushing the vouchers through. In other cases, there was a “failure of communication”, which amounts to dealers having trouble with the lengthy and sometimes confusing rules for submitting claims.

The big, and continuing problem we hear reported by our dealer clients is that even those good claims submitted as early as July 27, still remain unpaid, and continue to be listed as “under review.” One dealer is reported to be waiting on close to one million dollars– that is a lot of inventory out the door, with no voucher compensation from the government.

This, in addition to the lack of inventory at dealerships, due to the initial success of sales through the program, is contributing to what appears to be a cooling off of customer interest.

We all hope the NHTSA can get the cash flowing to dealers as quickly as Congress authorized the additional incentives last week.

Tags: Cash for Clunkers, dealer operations, finanical issues

This entry was posted on Thursday, August 13th, 2009 at 11:58 am and is filed under consumer credit, financial issues. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.