Dealers say federal cash is flowing faster

More than two weeks after the end of the federal Cash for Clunkers program, auto dealers still haven't been paid for all their transactions, but they say the speed of reimbursements is improving.

"It's night and day," said J. Theodore "Ted" Linhart, chairman and CEO of Dominion Auto Group, which owns nine Richmond-area franchises.

The Car Allowance Rebate System gave owners of older gas-guzzling cars and trucks $3,500 or $4,500 toward a new, more fuel-efficient vehicle. Old vehicles were then disabled and scrapped. The program ended Aug. 24.

While Clunkers helped boost sales at dealerships, dealers complained that the process to submit and then get reimbursed for sold vehicles was slow and laborious. Many protested that it was inefficient and were worried they wouldn't be paid.

Linhart, who sold 190 vehicles through the program, said since its end he has seen the pace of remittals jump dramatically. As of last Friday, he'd been paid for 22 deals. But since then, he's receiving payment on an average of 10 deals per day.

He credits the federal government for hiring extra contractors to process the paperwork. "It's been quite an impressive turn," he said.

Ray LaHood, secretary of the U.S. Department of Transportation, said yesterday that the government has approved $1.22 billion in reimbursements to car dealers for sales under the Clunkers program. More than 40 percent of the applications from dealers have been paid.

A survey by the Virginia Automobile Dealers Association found that, as of Wednesday, 28 percent of deals submitted by state dealers had been approved and 19 percent had been paid.

LaHood said the government is on track to pay eligible dealers by a Sept. 30 deadline.

Nick Scola, marketing manager for Henrico County-based McGeorge Car Co., said he has seen a major drop in the lag between submittals and payments. McGeorge's Toyota store sold 213 vehicles under the program and has been paid on 97 of them.

"What we're seeing is that we get paid within two days after we get the approval," he said. As of Aug. 25, the day after the Clunkers program ended, McGeorge had been paid on only 10 deals.

But not every dealer is happy with the pace of repayment. "This has definitely been a grinding process," said Craig Strosnider, vice president of Strosnider Chevrolet in Hopewell.

Strosnider sold 27 vehicles under the program but has been paid for only five, he said.

He said the processing system is still difficult to access and is plagued with problems. "We'll get paid," he said. "It's just a matter of when."

Contact Louis Llovio at (804) 649-6348 or .