Moneybags GM to Cover Clunker Deals

Edward Niedermeyer
by Edward Niedermeyer

General Motors has announced that it will lend dealers cash to cover their government clunker rebates for 30 days while the NHTSA figures out how to wind down the program. “We want to do all we can to provide customers with timely new vehicle deliveries and dealers the liquidity they need to run their businesses,” says Mark LaNeve in a company press release. “This will continue the sales momentum of our new fuel-efficient vehicles such as the Chevrolet Cobalt, Equinox and Buick Enclave.” Or, it could mean dealers will end up owing GM instead of the government owing them.

According to GM spokesfolks paraphrased by Automotive News [sub], “GM will offer the loan for any clunker deal deemed by the dealership to qualify, whether or not the government has given formal approval. The dealer must repay the loan within 30 days or GM will take the money owed back from the dealer’s open account with the automaker” [emphasis added]. If, as the NHTSA alleges, a large number of deals aren’t ending up qualifying, GM’s dealers will be in trouble no matter what. Would you rather wait for the government to pay you, or end up on the hook to GM? What a fun choice that is.

Ford and Chrysler have not made any decision to advance clunker cash to its dealers, but Hyundai was smart and started doing it before the program even began. Which might help explain why the money went so fast. Toyota Financial now pre-approves dealers in good standing for a special clunker credit line, while American Honda Financial is allowing dealers to deduct the amount of the rebate when the dealer pays off the inventory loan on a vehicle. At this point though, waiting for the NHTSA to sort out the tiny details (you know, like how much money is actually left) might not be a bad idea.

Edward Niedermeyer
Edward Niedermeyer

More by Edward Niedermeyer

Join the conversation
2 of 12 comments
  • JK43123 JK43123 on Aug 20, 2009
    Isn’t owing money to the government or gm really the same thing? GM is covering government bailout money with government bailout money. John
  • Monty Monty on Aug 20, 2009

    Actually, the Monopoly man's name is "Rich Uncle Pennybags". The budgeted amount for C4C was what, $3 billion? How much was the bailout to Wall Street? IIRC it is now somewhere north of $1 trillion. C4C is a drop in the bucket, and is probably going to end up somewhat mitigating the highs and lows of the economic cycle for a return to what passes for normal. If the federal government ends up on the hook for another $200 or so million, it's to be expected from a government program that initially had amorphous guidelines at best.

  • Lou_BC Too much money.
  • Lou_BC "The Cannonball Run" "The Gumball Rally""Corvette Summer""Duel""Gone in 60 Seconds"
  • Wjtinfwb I really don't care about charging stations, EVs, their drivers or the issues that seem to plague them and the ownership experience. My use case requires much better range and fueling options than what EVs offer, at least current state. If an EV works for you, great. It doesn't work for me and that's OK as well. hat I object to however, is the Government involvement in a personal use decision and trying to force a technology into widespread adoption when it and its support network is clearly not ready. I also object to Federal dollars, gleaned from the taxpayers being used to subsidize this nascent technology and most importantly, I object to the gaslighting by the Administration that tries to convince consumers that range isn't an issue. Recharging isn't an issue. Cold weather isn't an issue. Fires aren't an issue. The ownership experience disappointment is validated by the poor resale value of EV's and the McKinsey report that states that 50% of EV owners plan to switch back to a gas powered vehicle. I don't have the disposable income to make a 40k mistake and take a beating on getting rid of it. But again, if it works for you, that's what matters. Cheers.
  • MKizzy The top executives of many of the Fortune 500 companies support GOP candidates with their votes and donations while happily filling their corporate coffers with Progressive dollars. Unlike Musk however, they're smart enough to at least try to keep it to themselves. Perhaps Musk's political openness combined with his seemingly declining interest in Tesla is a sign he'll abandon Tesla by the end of the decade.
  • Jpolicke I don't know of any gas stations with a single pump.