The "cash for clunkers" program, which ends [in the U.S.] today, was "exactly the kind of stimulus" the country's automobile industry needed, the head of a state dealers' association said.
But, he added, it could have been administered a whole lot better.
"In hindsight, if consumers had to put up with what dealers are having to put with right now, there's no question that this program would have fallen flat on its face," said Jim Appleton, president of the New Jersey Coalition of Automotive Retailers.
Appleton was referring to the fact that, so far, very few dealers have been reimbursed for the cash incentives authorized by the program. That's caused a cash squeeze for many, forcing them out of the program prematurely.
The program, formally known as the Car Allowance Rebate System, will end at 8 p.m. today. It was supposed to have run through October, but its unexpected popularity with consumers led to an early draining of the $3 billion allocation made by Congress.
Through the program, car buyers were given credits of up to $4,500 toward a new car when they traded in one with lower fuel economy.
When it's over, estimates are that about 750,000 autos will have been sold, and an equal number of gas guzzlers will have been removed from the road and junked.
Federal officials initially thought $1 billion would be enough to sustain the program for several months, but that money was gone in less than a week. Congress then allocated an additional $2 billion, thinking that money would last until October.
But, Appleton said, consumers' "pent-up desire" to buy new cars was released.
"It was extraordinarily, unexpectedly much more successful at sparking consumer interest and tapping into the pent-up demand in the marketplace," he said. "In terms of meeting it stated goal, it was a home run."
But behind-the-scenes problems in processing applications resulted in dealers not being reimbursed for the credits as soon as they'd expected.
That caused a cash crisis for many dealers because the rebates came out of their pockets.
"I have to pay my employees and pay my taxes," said Paul Larson, owner of Larson Ford in Lakewood. "So far, it's been all outlay and nothing's coming in."
Larson said his dealership has done 38 cash-for-clunker deals, "and I haven't been paid for one by the government. That puts a tremendous strain on my cash resources."
He said he's waiting for about $200,000 in reimbursements.
Larson said he had been delivering cars to purchasers, but now he's taking deposits until his reimbursements start coming in.
Sea Breeze Ford in Wall also has stopped delivering cars to consumers, said principal Steve Schmelz.
Schmelz said his dealership is owed about $60,000, "not a killer amount of money."
He said he had a "severe" lack of inventory when the program began, so he wasn't hit as hard as others.
Still, Schmelz said, he wants his money.
"It's like a bureaucratic nightmare," he said. "If you forgot crossing a "T' or dotting an "I,' they just reject the claim. We have 14 in process. We just hope we keep correcting whatever mistake we made and get paid."
U.S. Secretary of Transportation Ray LaHood has said that all dealers will receive the money owed them. The department recently tripled its work force and authorized overtime to help get through the backlog of applications.
