The cash-for-guzzlers program may run out of its $1 billion funding well before its Nov. 1 expiration date, a spokesman for the National Automobile Dealers Association said today, after the government said dealers have already applied for 10 percent of the funds.
The initiative to boost U.S. auto sales has been a success, NADA spokesman Bailey Wood said in a revised statement. Accordingly, NADA is currently working with (the National Highway Traffic Safety Administration) to emphasize the importance that every dealer be reimbursed by NHTSA for a valid deal.
As of 4 p.m. Wednesday, dealers had submitted 22,782 deals worth $95.9 million in reimbursements, NHTSA said today in a statement.
Thats an average of $4,209.26 per deal, indicating that a majority of sales include $4,500 vouchers. Dealers filed $27 million worth of requests during the workday Wednesday, compared with $51.9 million filed during the previous 24 hours. The system for filing applications is now in its sixth day.
An earlier NADA statement said the funds will be exhausted by Nov. 1 and the association is working with NHTSA to ensure that every dealer is reimbursed."
The cash-for-guzzlers program has a $1 billion budget to pay dealers back for giving consumers $3,500 to $4,500 for trading in some gas-guzzling vehicles for new ones with better fuel efficiency. As much as $50 million of that budget can go toward NHTSAs administration costs.
The $95.9 million is the amount of money dealers have requested for reimbursement, NHTSA spokesman Rae Tyson said today. That clarified a previous statement that the money was the amount approved for dealer payouts.
Tyson said he did not know how long it would take for dealers to receive their payments. The governments www.cars.gov Web site says it will take about 10 days for voucher money to appear in dealers accounts after each request gets approved.
Tyson said he wouldnt make any prediction about when the funding will run out.
He pointed to his comments Wednesday in an interview with Automotive News, when he said NHTSA was taking steps to ensure that if the program budget is exhausted, dealers would not be left holding the bag for credits they paid to customers without getting reimbursed.
"We will not, repeat will not, put those dealers at any risk in terms of transactions they may have in the pipeline," Tyson said Wednesday.
Ken Czubay, Ford Motor Co.s vice president of U.S. sales and marketing, echoed NADAs prediction at a press event today.
We can safely say $1 billion dollars will not last through Nov. 1, he said. The program in the very early stages has to be viewed as a huge success.
Czubay wouldnt predict when exactly the money is likely to run out, saying the industry needs to see another week of sales to accurately estimate the pace.
But Ford dealers have seen a significant increase in business in the six days since the program rules came out, he said. Ford and other automakers are lobbying for more money to be added to the program.
Sales of vehicles such as the Ford Fusion, Focus and Escape have spiked in the last week because of the guzzlers incentive, said Mike Crowley, Fords group marketing manager for large cars and crossovers.
Sales eligible for the reimbursements could have taken place as early as July 1, but the government released rules for the program six days ago, when registration began. About 23,000 franchisees have signed up, NHTSA said today, adding that 19,328 of those have been instated into the program so far.
Amy Wilson contributed to this report