I don’t know anyone in the business that isn’t ready for this “Cash for Clunkers” thing to be over, so this is great news.
The biggest problem turned out to be that the dealers aren’t being paid – still. The program was so misjudged by the folks that conceived it that the very important promise to have dealers compensated within 10 days became impossible.
Do the math – if a dealer has sold 50 vehicles under the CARS program, at an average of about $4,200 per unit they are owed $210,00. The most I’ve had a dealer tell me they’ve had approved and paid for is 10 percent. How would your small business be doing if $190,000 of it’s working capital were suddenly missing..? This is called stimulus?
Government Healthcare is going to be awesome!!! – I’m sorry Mr. Smith, but we need these 20 forms filled out before the doctor can see you, then get in that line over there…
One example of what’s happening is that dealers are submitting the paperwork and if everything isn’t exactly in order the whole deal must be re-submitted with the issue fixed. Once that happens, the entire file goes back to the bottom of the pile where the whole thing must be reviewed again – I’m sorry Mr. Smith…
And the government meddling has caused supply issues – if this could happen with cars, what is going to happen with doctors? Go look at your local car lot…
The good news is that I’ve heard some anecdotal evidence that some buyers are people that actually had money to buy a car. They figured if the government is going to just give money away that they might as well take advantage of it. Why not own a new car that’s still worth what you paid for it when it leaves the lot?
Now we’re going to need another bailout to save the dealers that don’t survive the cash flow hit… I’m getting dizzy.