WASHINGTON -- The Transportation Department has repaid dealers for more than a third of the vouchers they gave consumers under the cash-for-clunkers program, a federal spokeswoman said today.
As of this morning, the government has paid dealers $1.22 billion for 289,000 vouchers, said Jill Zuckman, spokeswoman for Transportation Secretary Ray LaHood.
That's 42.4 percent of the $2.88 billion applied for by dealers under the program, which accepted rebate submissions from July 27 to Aug. 25.
The latest figures suggest a dramatic increase in reimbursements over the last week after Transportation doubled the staff that is processing dealer applications.
Meeting the new deadline
The Obama administration has set a Sept. 30 target for reimbursing dealers for all properly filed claims.
“We'll meet our deadline,” LaHood said today at a press conference, “Every dealer will be paid if they provided us the accurate information.”
LaHood's payment assertions today were supported by dealers and their representatives.
“Those figures do sound correct,” said Donald Hall, president of the Virginia Automobile Dealers Association, who has been a critic of the pace of dealer reimbursements. “The money is starting to pour in.”
Ohio dealers reported today a reimbursement rate of between 20 percent and 33 percent, said Ohio Automobile Dealers Association president Tim Doran.
At a board meeting of the association, "the mood was reasonably good that dealers do feel they will ultimately get paid but discouraged that it already has taken so long," he said.
Higher rejection rates?
Earl Stewart, a Toyota dealer in North Palm Beach, Fla., said his reimbursements have more than doubled in the last week.
“I'm very pleasantly surprised,” he said in an e-mail. “I have to admit that I was skeptical about (Transportation) having made most of the payments by the end of this month, but I'm happy to say I was wrong.”
A week ago, Stewart said he was paid $226,000 and was still owed $1.1 million.
As of today he said he has been paid $464,500, and is still owed $774,500.
Stewart and other dealers expressed concern, however, that the rate of government rejections of dealer applications also seems to be increasing.
NADA spokesman Bailey Wood said the Transportation Department has had one processor review a dealer's first application and, if it is rejected and resubmitted, a second processor examine the second application.
"Often the claims are being rejected for two different reasons," he said. "The same eyes should be on a dealer's submission and resubmission."
LaHood, asked about this issue after his news conference today, struck a conciliatory tone.
"We'll work with you," he said of dealers frustrated by the resubmission process.
Getting more help
Under the law signed by President Barack Obama in June, dealers were required to be paid within 10 days of their filing an application. That requirement has been widely breached by Transportation.
On Sept. 3, a National Automobile Dealers Association survey found that 9.1 percent of all claims had been paid.
That figure squares with what Transportation Department officials told Rep. Michael Rogers, R-Mich., last week.
They said the reimbursement rate was close to 10 percent, he said. If accurate, the figures suggest that rebates have more than quadrupled in the last week.
LaHood said today that staff had been pulled from different Transportation Department agencies, including the Federal Aviation Administration, to process dealer claims.
Even some IRS employees were detailed to work on the applications, though they are no longer doing so, Zuckman said.
The cash-for-clunkers program authorized dealers to give consumers federal rebates of up to $4,500 for trading in gas guzzlers for new cars with better fuel efficiency.