NADA Survey Finds Only 5.7 Percent of Dealers Reimbursed for Cash for Clunkers Deals

A new survey conducted by the National Automobile Dealers Association (NADA) shows that new car dealers in four states have only received reimbursement for 5.7% of the cash for clunkers applications they filed with the federal government.

The survey, conducted last week in Alabama, Louisiana, North Carolina and Virginia found that dealers in those states had received reimbursement of 2,701 of the 47,693 applications they filed with the National Highway Traffic Safety Administration.

Virginia Automobile Dealers Association president Donald Hall says, “It’s like watching paint dry. The government doesn’t see the sense of urgency in paying money back to dealers.”

The NADA survey was conducted by the individual associations in the four states on August 26 and 27, just days after the August 25 deadline the Department of Transportation set for dealers to submit claims.

The survey results are by no means comprehensive and represent only about 7% of the nearly 700,000 cash for clunkers transactions completed. However, it is the most current data available on dealership reimbursements.

Both the Obama administration and Department of Transportation have declined to provide definitive information concerning the number of dealers who have received reimbursements and when the remainder of the outstanding reimbursements might be made.

When presented with the NADA survey findings, Transportation Department spokespersons would not comment.

Adding to the frustration felt by many dealers, is the survey’s finding that in recent weeks there have only been incremental increases in payments to dealers over previous weeks. This comes despite the Transportation Department’s addition of nearly 1,750 personnel to expedite the reimbursement process last month.

Some progress is being made, albeit small. As of August 26, participating new car dealers in North Carolina had received reimbursement on 6.6% of submitted claims. That number was up from a mere 1.7% just two weeks earlier.

North Carolina Automobile Dealers Association president Robert Glaser says, “The results are significantly better but still horribly dismal.”

Beyond simply causing frustration for thousands of new car dealers, the federal government’s delay in making payments is also a breach of its legal obligation to make reimbursements within 10 days of receiving dealer claims as stipulated in the bill which President Obama signed into law in June.

Automobile Dealers Association of Alabama president Thomas Dart is sympathetic to the government’s dilemma. Dart says, “The problem was that you didn’t have a bureaucracy set up, and had to create one overnight. I personally think these problems are understandable.” The August 27 survey of his association members found that 6% of program participants had been reimbursed.

President Obama and Transportation Secretary, Ray LaHood, have repeatedly assured dealers that they will be reimbursed but have offered no time frame.

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