Daily Auto News You Can Still Get Cash For That Clunker
Daily Auto News
The end of the government’s Cash for Clunkers trade-in program, set for Monday night, is dominating the day’s news, but despite media reports, it is still possible to complete a Cash for Clunkers-driven deal this weekend.
Not all dealerships will be participating — many have pulled out of the program. The New York Times notes, “The Greater New York Automobile Dealers Association, which represents dealerships in the New York metro area, said that about half its 425 members had left the program.”
The program requires dealers to complete transactions, allow buyers to take possession of their new car and credit the buyer with up to $4,500 for the older, less-efficient car they trade in. Only then can the dealership apply to the government for reimbursement – and wait for the money. On Thursday, the National Automobile Dealers Association said the government was so far behind in processing those applications that many dealers were awaiting millions of dollars in reimbursements. Greater New York Automobile Dealers Association spokesman Mark Schienberg told the AP that “the group’s dealers have been repaid for only about 2 percent of the clunkers deals they’ve made, leaving many short on cash.”
But automakers themselves have stepped in to bridge the gap. Fox News reports, “Eight months after the federal government stepped in to bail out U.S. auto giants, the beleaguered companies are turning the tables and helping the government bail out itself.” General Motors let its dealership network know on Thursday that “it will immediately start providing “cash advances” to dealers equivalent to the rebates that are being processed, and will do so for the duration of the program.”
The move means that GM dealerships are free to continue making Cash for Clunkers deals this weekend, knowing that the automaker itself will reimburse them for vouchers until the government completes its processing. Fox notes, “A White House spokesman said Toyota and others have also stepped up to guarantee the rebates so that dealers can continue the program.”
According to Motor Trend, Chrysler has also told its dealers that it “will advance their dealers the money…while the government catches up on payments.”
The companies have real motivation to extend the Cash for Clunkers sales boost as long as possible. The Wall Street Journal notes that, after the White House announced that the program will end Monday at 8 pm, “Tokyo stocks fell Friday as major automakers Toyota Motor, Honda Motor and others stumbled.” Analysts appear to have little confidence that the automakers can sustain their recent sales success without government help.
So what should weekend car shoppers expect? The Washington Post reports, “With the end in sight, many dealers are preparing for a flurry of last-minute customers over the weekend, and some are calling and e-mailing customers who were on the fence, perhaps threatening a surfeit of business.” NADA Chairman John McEleny told the Post that “he had been assured that the government has done calculations to make sure there is enough money left to get through the weekend.”
A Department of Transportation press release this morning reassured dealers that, “Based on conservative estimates of valid transactions so far, DOT analysts have projected that there is enough money to continue accepting submissions until the Monday deadline.” However, it cautioned, “Applications for rebates will not be accepted after 8 p.m. EDT Monday and dealers should not make further sales without receiving all the necessary paperwork from their customers.”
We advise car shoppers looking to complete a Cash for Clunkers transaction this weekend to begin their shopping on the phone – call local dealers to ensure that they are still participating in the program before leaving to begin your search. Do your research, and know the make, model, trim level and options packages you’re interested in before engaging with a dealership. And remember, you don’t have to take delivery from dealer stock – the Department of Transportation allows Cash for Clunkers trade-ins even if you are ordering a car from the factory, so it is possible to complete a deal for a car the dealer says he doesn’t have on the lot, though you will have to wait for the car to be built and shipped to the dealer before you can pick it up, and you’d have to leave your clunker behind while you waited.
U.S. News has comprehensive reviews of every Cash for Clunkers qualifying car, as well as current information on the prices people in your area are paying for them – we can even offer you a guaranteed, pre-negotiated price. If you’re in the market for a new car, check out the U.S. News rankings of this year’s best cars as well as this month’s best car deals.
If you’re interested in the Cash for Clunkers program, check out our Cash for Clunkers page. If you’re ready to buy, contact local dealers. For the latest news on the program, check out Cash for Clunkers news.
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