NY Car Dealers Dump Clunker Program

As I wrote earlier, the government-run Cash For Clunkers program has only managed to pay 2% of the claims made by auto dealers. For heaven’s sake, it’s a simple rebate program! If such a program can be run efficiently by hundreds of different manufacturers around this country, why can’t government do it? I believe that to ask the question is to provide the answer.

This problem has gotten so bad that some dealers are worried about going out of business because they’re not being reimbursed. In fact, dealers in New York are pulling out of the program entirely.

Hundreds of auto dealers in the New York area have withdrawn from the government's Cash for Clunkers program, citing delays in getting reimbursed by the government, a dealership group said Wednesday.

The Greater New York Automobile Dealers Association, which represents dealerships in the New York metro area, said about half its 425 members have left the program because they cannot afford to offer more rebates. They're also worried about getting repaid.

In the real world, dealers can’t afford to sell cars in the program if the government doesn’t promptly issue checks. It’s called cash-flow, and government cannot issue checks slowly and expect the thing to work.

Many dealers have said they are worried they won't get repaid at all, while others have waited so long to get reimbursed they don't have the cash to fund any more rebates, Schienberg said.

"The program is a great program in the sense that it's creating a lot of floor traffic that a lot of dealers haven't seen in a long time," he said.

"But it's in the hands of this enormous bureaucracy and regulatory agency," he added. "If they don't get out of their own way, this program is going to be a huge failure."

And these are the people we want to run our health care?