WASHINGTON -- In apparent violation of the new cash-for-clunkers law, the Department of Transportation is more than 10 days late in paying rebates of at least hundreds of thousands of dollars on dealer claims, several dealers said.
Brad Wood, a dealer in Salisbury, N.C., said he has 12 unpaid claims for $47,000 pending since Aug. 1. Altogether, he is waiting for $319,000 in rebates and has received only $26,000.
Ive never experienced anxiety like this in business before, said Wood, who owns Kia, Chrysler and Honda stores. If I dont get paid, I will have been working almost free for several months.
The clunkers law signed by President Barack Obama in June requires that dealers be reimbursed by the government within 10 days for $3,500 or $4,500 credits theyve paid to customers.
Transportation Secretary Ray LaHood said payments to dealers began Aug. 4. He also said that the computer glitches holding up dealer claims and payments had been solved.
We fixed our Web site problems," LaHood said at an Aug. 4 news conference here. "We believe processing will go much smoother."
Rep. Fred Upton, R-Mich., said failure to reimburse dealers in 10 days means the Transportation Department isnt doing its job.
I will be on Secretary LaHoods case if I hear that from my local dealers, he said in an interview.
The National Automobile Dealers Association concurred last week with LaHoods optimistic assessment.
There are kinks still left in the system, but they, too, are being worked out, spokesman Bailey Wood said Aug. 7.
But on Wednesday, Wood, who is not related to the North Carolina dealer, was singing a different tune after hearing a raft of complaints from dealers around the country.
Theyre angry and nervous, he said. Theyre getting fed up with the program.
Dealers are reporting that they cant get responses to their claims, leaving them in limbo as to whether theyve been approved or rejected, Wood said.
Many also are getting rejections for procedural minutiae that they cant straighten out because Transportation employees are inaccessible by phone or e-mail, he said.
Perhaps most significant, dealers arent getting paid in significant numbers, Wood said.
Very few dealers are getting very little money, said Bob Israel, president of the Louisiana Automobile Dealers Association. Its not working more smoothly at all.
About 20 Louisiana dealers visited his offices Tuesday for a board meeting, and most reported that they hadnt received any federal rebates, he said.
David Wilson, a Toyota dealer in Orange County, Calif., said he has been paid for only three of the 92 claims he submitted before Aug.2, leaving him holding the bag for about $374,000.
Altogether, he has 450 unpaid claims filed for a total of $1.9 million.
Im worried the government will run out of money before we get paid, Wilson said.
LaHood has said the $2 billion added last week will last until around Labor Day.
James Barkhouser, a dealer in Danville, Va., said he hasnt been paid on any of the 40 claims he has filed, including 10 submitted July 30.
NADA on Wednesday called the continuing problems to the attention of the National Highway Traffic Safety Administration, spokesman Wood said.
NHTSA spokeswoman Karen Aldana declined comment.