Large dealership groups say the federal government owes them millions of dollars for the cash-for-clunkers program. They may be the largest IOU holders, but they are not alone among dealerships waiting for the check to arrive.
The Department of Transportation said today that the cash-for-clunkers program would end at 8 p.m. Monday, noting that the $3 billion fund is nearly depleted.
AutoNation Inc., the nation's largest dealership group with 269 dealerships, is owed $45 million, says spokesman Marc Cannon.
AutoNation CEO Mike Jackson said in an interview with CNBC yesterday that the government incentive program is a "fantastic stimulus program." But he added that the U.S. Department of Transportation was not prepared to deal with its success.
Jackson said he is confident that the logjam will break and rebates to dealers will start to flow in a few weeks. But in the meantime, dealers who participate in the program are advancing money on behalf of the consumer, he said.
"That's money out the door that the industry is now trying to collect from the U.S. government," he said.
As of Tuesday, dealers had submitted claims to the U.S. government for 411,624 clunker transactions eligible for rebates of $1.72 billion, according to the Department of Transportation.
Sid DeBoer, president of Lithia Motors Inc. says his group sold about 1,800 vehicles under cash-for-clunkers and has been paid for about 70 of those deals. He says the government owes the group more than $6 million.
"We have access to capital, and we're OK," DeBoer says. "It's just that we're not getting any interest on the money." Lithia has about 90 dealerships, DeBoer says.
Dave Cosper, CFO of Sonic Automotive Inc., the nation's third-largest dealership group, said the group has been paid $400,000 to $500,000 from the government for cash-for-clunkers deals, but is still owed close to $20 million.
"We can handle it because we have some funds, but that is a very large number, even for us," Cosper says.
Large dealership groups aren't the only ones waiting for checks to arrive.
About two-thirds of dealers responding to an Automotive News survey on Tuesday said they have received no payment from the government for cash-for-clunkers sales. Payment has been received for fewer than 3 percent of total deals, survey respondents said.
Dave Wilson, owner of the Preston Automotive Group, in Preston, Md., says he has been paid for just a few of the 300 cash-for-clunkers transactions. He says he is owed more than $1 million.
He says: "We're hoping that the payment process will start to pick up."