Quote of the Day: Overstimulation Edition
Published: August 18th, 2009
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It’s just a mess, an absolute mess. There is a billion dollars of dealerships’ money on the road.
Says Duke Brubaker, general sales manager of Champion Ford-Lincoln-Mercury-Mazda in Owensboro, KY, to Automotive News [sub]. Champion has ceased clunker participation, along with 89 other dealerships surveyed in AN’s survey of 710 dealers. NADA officials allege that CARS’ rejection rates have climbed as high as 80 percent in recent weeks. NHTSA claims they have fallen in the last ten days. How’s about another $3 billion?
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Agenthex - you're kidding, right? I have dealer clients who have done 100+ C4C deals and plenty who have done 40 to 60 of them. That's a HUGE amount of money to be waiting on in a very cash flow dependent business. We're talking hundreds of thousands of dollars. PLUS, the dealers have to wait on the factory rebate/incentive money that almost all new cars have today, which is also usually in the thousands(2010 Pontiac Vibe - $2,500 rebate, 2009 Kia Spectra - $3,500 rebate). Multiply that times 40-50 or 100 cars and see what you get. The dealer needs that cash RIGHT NOW to pay off the floorplan loan on the the new cars he has sold and pay off the loans on any trade-ins. (Remember the movie Fargo?.. the dealer was in deep sh*t for not paying off GMAC floorplanning for the new cars that he had already sold.) Tomorrow, stop by your nearest decent-sized new car dealer, the one with the row of 25 or 30 clunkers out back with big X's on the windshields. Find the dealership owner and ask him what's the big deal about a measly $4,000 on a dozen or so cars and see what he tells you. We'll be waiting for your report.
Agenthex - Here's someone you can call and ask what they're whining about. Good luck with that. August 19, 2009. The U.S. government owes AutoNation, the country's largest auto retailer, about $45 million in rebates for the popular but backlogged "Cash for Clunkers" program, the Fort Lauderdale company said Wednesday. http://www.sun-sentinel.com/business/sfl-autonation-clunker-081909,0,1331669.story
Agenthex - Maybe you can lend this guy $225,000 so he'll stop whining about the inefficiencies of our Federal Government. "But the backlog already has pushed some dealers, including several hundred in the New York area, to refuse any more trade-ins under the program. “I’m a small store,” said Ron Morehead Jr., general manager of a Honda dealership in Kingston, N.Y. “The well runs dry.” Mr. Morehead said he had paid out some $225,000 in rebates since the program began last month, but had only been reimbursed for one deal, which he filed with the government on July 28. Meanwhile, he said, he still had to pay his 30 employees, pay his bills and repay the bank when he sold a car."