Some Valley Dealers Worry About New Refueling to Clunker Program

August 15, 2009 12:00:00 AM PDT
Local car dealers said interest in the government's cash for clunkers program is dying off because dealers are running out of inventory. Sponsors of this rebate program say it is okay to take a car barely off the assembly line.Inventory is trickling in at Lithia Dodge dealership which means people can trade in their clunkers right away. But if people place an order for a new car today, money could run out for this program before the car arrives.

The cash for clunkers program has caught the eye of customers. But after a few weeks of lot busting sales and decreased inventory the government is once again trying to refuel this program. Now dealers can pre-order cars for prospective clients.

"It just got too big, too fast," said Future Ford general sales manager James Cagle. Cagle is waiting for payments on 76 clunkers gathering dust on his back lot. His attorneys have told him to hold off on pre-ordering cars under cash for clunkers.

"For the dealer to claim their money from the government we have to have the VIN number on the vehicle," said Cagle. Once a car is ordered the VIN number is not available for at least 4 weeks. By then there may not be enough money left in the program.

Cagle: "When they extended the two billion dollars they said it was gonna run through labor day. I don't see it going that long."

There are five future dealerships in the state of California. The government owes them $1.5 million for their clunkers. However, they've only received payment for 10 clunkers. "We've got our fingers and toes crossed that the government does what they say they're going to," said Cagle.

At Lithia Dodge general sales manager Mike Coble has only received payment for one of the 17 clunkers on his lot. "I've had a few rejected, is what they're calling it. And we just fixed that. A small clerical error. Resubmit it and then it's the waiting game again," said Coble.

Coble welcomes the pre-order deal. For months Chrysler's inventory has fluctuated because of bankruptcy but now cars and trucks are arriving. "We've been ordering cars as fast as we've been selling them. And a lot of those are getting assigned VIN numbers so that's going to work out for us too."

A few other dealers we spoke to are very hesitant about this new pre-order option. Others do have VIN numbers of cars in the pipeline and are willing to go through with the deal.

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