Would you believe that two-thirds of all car dealers are still waiting for their first clunker check? Could you imagine that only three percent of all clunker deals have been been blessed by NHTSA? Automotive News [sub] has the survey for you! The only problem is that AN admits the poll was unscientific. Plus, it was an online poll. Still, the headline looks good beneath a headline in which NADA admonishes that dealers are “at risk” in making further clunker deals. And NADA’s internal surveys show that all the clunker money is already gone, reinforcing the apocalyptic tone of the AN survey.
“It is important to note that NHTSA has confirmed elsewhere that if the program’s money runs out before a dealer is reimbursed, that dealer will not be paid,” NADA warns. “Dealers who accept additional ‘clunker’ deals face a growing risk that they may not be reimbursed.” The implication is that the NHTSA is so completely out to lunch that it’s putting dealers at risk. Meanwhile, NHTSA is blaming the high rejection rate on dealers’ inability to fill out forms properly. And if rejection rates stay high, dealers won’t have to worry (as much) about the money running out. Of course the possibility that the money is almost gone could also bring in the stragglers, hoping to get in on the clunker deal at the last minute. Unless NHTSA comes up with a wind-down strategy fast, overspending is a real possibility. You have to know that some entrepreneurial lawyers somewhere are getting ready to have a field day with the CARS program.