Cash Flow vs. Cash For Clunkers vs. The Next Related Fiasco!

Philip Zelinger
Cash for clunkers has been a complete fiasco on many levels with some more obvious than others! GM finally stepped in to advance funds to dealers who couldn't absorb the negative cash flow but you aint seen nuthin yet! In my opinion - and that of the NADA - Monday will be too late to cover the deals already delivered and I anticipate that the government's solution will be to decline deals either on technicalities or after the fact changes in the rules - like they did when they changed the qualifying vehicles in the beginning of the program. Do you think that EVERY dealer will be paid on EVERY delivered vehicle? If so, I have some swamp land in Florida that has your name on it! I think I have warned my dealer clients to avoid all the problems associated with the Clunker program but maybe you have some problems that I haven't seen yet so please add them to my list so maybe me and mine can avoid them. After all, what are friends for!
Rick Gladwell
We are a dealer group in western north carolina, we did 129 clunker deals and have outstanding balance 0f $555,000 so far we have been paid on 7 deals, to say i'm worried is an understatement. I wonder if this is going to turn out to be a major mistake on our part?
Jon Groenig
I'm with you on this one Phillip, I think there is a good chance many dealers are going to end up empty handed. The government has already shown that they can change the rules anytime they want, so whats to stop them from doing it again. The worst part of this program is that dealers are taking abuse from consumers because the government has not paid out like it was supposed to. Many dealers are trying to make the best of this situation while reducing their risk by not delivering cars until the rebate is accepted or having customers sign a form saying they will make up the $4,500 if the government denies their claim. A lot of consumers have taken issue with both these options and are threatening to sue dealers because the CARS program does not allow these options. So let me get this straight, if the government changes the rules and backs out of paying the claims, they don't want to give the dealer the option of collecting the balance from the consumer? Maybe this is just stage two of the governments
Philip Zelinger
Just an update to further the basis for our shared paranoia which should now more accurately be defined as legitimate concern. The government has started a review-audit process going dealer by dealer to confirm that all of the paperwork and processes were followed. If it is anything like an IRS audit - and friends who have exeperienced it suggested that it was - get ready to rumble! To add insult to injury, when the auditer gave my client a clean bill of health he asked when he would get his money and the auditer explained that her job was just to conduct the audit and he would have to follow normal channels to find out the status - even on the approved deals! Do you smell something burning?
The law clearly staes that "dealers will be paid as soon as practicable, but no later than 10 days from submission of qualifying documents." They are already in violation of Federal law. Obviously what they say, and what they legislate has no bearing whatsoever on their actions. 0% of our deals where paid in 10 days.

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