Gov't Extends Deadline for Clunkers Paperwork

August 25, 2009 - 5:22 PM
Car dealers will have a bit more time to get reimbursed for their Cash for Clunkers deals after the government extended the deadline for filing applications for the $3 billion government incentives into Tuesday evening.

Mariano Serrano holds Cash for Clunkers government paperwork Monday, August 24, 2009, as he looks at the car he hopes to purchase with the help of the government program. (AP Photo/Nick Ut)

Washington (AP) - Car dealers will have a bit more time to get reimbursed for their Cash for Clunkers deals after the government extended the deadline for filing applications for the $3 billion government incentives into Tuesday evening.
 
All sales under the program ended Monday evening. But after already pushing back the deadline to submit records for the car rebate deals to noon Tuesday, the Transportation Department said the deadline would be extended to 8 p.m. EDT because of problems with its Web site.
 
Government computers set up to handle the filings were deluged by dealers trying to send in their sales agreements at the last minute. Before the extension, all the paperwork was due to be submitted by Monday night, but the big rush of submissions shut down the government's computer filing system temporarily. That raised concern among dealers that they wouldn't be repaid for the $3,500 or $4,500 per vehicle incentives, and prompted them to push for an extension.
 
The government agreed to give dealers more time to provide the proper documentation and have ramped up staff to handle the influx. Transportation officials said the computer system was up and running on Tuesday morning.
 
Geoff Pohanka, who heads about 15 dealerships in Maryland and Virginia, said he had submitted about 910 clunker deals to the government and had only received payment for 16. He estimated the government owed his dealership about $4 million for the outstanding claims and was hopeful to get the final 90 voucher submissions into the system.
 
"Every 30 seconds, we're going back to the computer to see if we can get them in," he said.
 
Transportation officials said that, through early Tuesday, dealers had submitted 665,000 vouchers totaling $2.77 billion. Many dealerships have worked overnight in recent days to submit each trade-in vehicle's 13-page reimbursement application, including the title, proof of registration and proof of insurance. They have pressed employees to double- and triple-check their paperwork to ensure that applications won't be rejected.
 
"We've spent the better part of the last three days trying to hack our way into their computer program that has been down more than it's been up," said Alan Starling, who owns two General Motors dealerships in central Florida.
 
Cash for Clunkers has been wildly successful in spurring new-car sales and getting gas-guzzling models off the road, though some energy experts have said the pollution reduction is too small to be cost-effective. Customers received rebates of between $3,500 and $4,500, depending on the improvement in fuel efficiency from their old vehicle to their new one.
 
Transportation Secretary Ray LaHood, speaking to reporters in Norristown, Pa., said the program was an unprecedented success and a boon for car dealers, automakers, scrap yards and financial institutions. He estimated that by the sales deadline on Monday, "there will be 700,000 to 800,000 cars that have been sold, most of them fuel efficient," replacing gas-guzzling cars and trucks.
 
Dealers so far have only received a fraction of the reimbursement funds they are owed. Through last Thursday, the most recent data available, the Transportation Department had reviewed and processed more than 150,000 reimbursement applications and approved just $140 million in payments to dealers. At the time, DOT had processed about 30 percent of all the applications they had received.
 
"With the added staff and the better paperwork submitted and everybody being more comfortable with the process, it's like a logjam. It's going to break through," said Michelle Primm, managing partner of Cascade Auto Group in Cuyahoga Falls, Ohio.
 
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AP Auto Writer Dan Strumpf in New York and Associated Press writer JoAnn Loviglio in Norristown, Pa., contributed to this report.