Clunker cash drying up

LIMA — Car buyers eager to snag a good deal have burned through the “cash for clunkers” money, leaving dealerships to wonder just how much of the $1 billion is left.

“We’re waiting to see what the Senate does but there are a lot of indications out there that the initial billion dollars has been used up, or is close to being used up,” said Charlie Howard, staff counsel for the Ohio Automobile Dealers Association.

The Senate is expected to take action on funneling an additional $2 billion into the Car Allowance Rebate System sometime this week. The measure easily passed the House on Friday, but several senators have been critical of adding more money.

In the interim, the auto dealers association has told dealerships to use caution and good business judgment in going forward with more deals.

“We’re setting all the paperwork up and sending the deals in, but until we get the money, we’re not going to release anything,” said Joe Shaw, general sales manager at Lima Auto Mall.

For other dealerships, the program seems quite literally to have gone up in smoke.

American Township firefighters were called to Allan Nott Honda Toyota Scion Monday afternoon after a van taken in on trade caught fire. The van was just one of about 60 vehicles Allan Nott has received through the program, but general manager Eric Martin said they haven’t had a single one approved.

“The liability that’s out there for the dealerships is pretty huge,” Martin said.

In fact, every car dealership The Lima News contacted Monday said they had yet to see any money. Claims are supposed to be paid within three to 10 days from being filed, a rapidly approaching deadline.

Howard said the association was just hearing Monday that a few claims were beginning to be paid.

Without knowing the future of the cash for clunkers program, Martin said his dealership decided to suspend its participation on Saturday.

“There’s no communication from the source itself on where we are with things, how much money is left, if we should keep turning in claims, what’s going to happen to claims when there’s not enough funding,” Marin said. “It’s just been a lot of frustration.”

Other dealers have a more optimistic view.

Tom Brown, general sales manager at Tom Ahl Family of Dealerships, said they’ve taken in about 40 cars and continue to run the program.

“We’ve done everything we’re supposed to do,” he said. “We’re submitting them like we’re supposed to. There’s no sign for us to panic that we’re not going to get paid.”

One thing dealerships can agree on is that the program has put bodies in the showroom. It has also helped Ford Motor Co. post its first monthly sales increase in nearly two years.

“I think from that perspective, the program has done everything it was supposed to do and I think there’s a pretty good argument that it’s been the most successful stimulus package of this recession,” Howard said.