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Govt. Slow To Reimburse Car Dealers For Clunkers

Posted: 3:50 pm PDT August 14, 2009Updated: 11:41 am PDT August 18, 2009

Here is an update to our story on the Cash for Clunkers program:

A car dealer in the North Sound says it is back in the Cash for Clunkers program.

Last week, Lynnwood Honda said it was suspending the program.

But the owner told KIRO 7 Eyewitness News Tuesday that he is taking clunkers.

He also said he expects to get his first check from the federal government later this week.


There's heavy criticism of the government's Cash for Clunkers program, but it's not coming from car buyers.

KIRO 7 Consumer Investigator Amy Clancy says car dealers complain that it's taking too long to get reimbursed from the government, leading at least one dealer to drop out of the program.

For new car buyers, cash for clunkers is a big hit.

"I really think it's a good program," said one car buyer.

New car dealers are less enthusiastic.

"We've been selling lots of cars, but getting your money out of the government's been a little slow," said Bruce Titus, who owns a Nissan dealership in South Tacoma.

He has dozens of clunkers on a back lot, and although he's already given up to $4,500 discounts to their previous owners when they bought a new car, he has yet to get reimbursements from the federal government for most of them. And he says he's not alone.

"You've got some guys that have got 70 to 100 clunkers done and they don't have any money. I mean, that's a half a million bucks," Titus said.

One of them is Eric Nelson of Lynnwood Honda. He told us the government owes him more than $400,000, and so far he hasn't received a dime. He's so angry he's dropped out of the cash for clunkers program.

"It has absolutely put a cash crunch on many dealers," said Mary Byrne, who is president of the Washington State Auto Dealers Association and a car dealer herself.

She says most dealers are frustrated with the government, but are happy to see more customers on their lots, so for now they're willing to grin and bear it. But just barely.

"We're probably seeing less than 10 percent of the claims being paid right now, and unfortunately, we still have a lot of dealers like myself. We haven't received an acceptance or a rejection on any of them," Byrne said.

If you want to take advantage of the cash for clunkers program, you'd better hurry. It's due to end on Labor Day.

You can check cars.gov for information on the Cash for Clunkers program and www.kbb.com to see if your car qualifies.

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