WASHINGTON — The Transportation Department extended the deadline Monday for auto dealers to submit their "cash for clunkers" deals, giving them more time to make sure they get repaid under the popular $3 billion government rebate program.
Dealers now have until 11 a.m.CDT today to submit the necessary paperwork, after the deadline was pushed back from 7 p.m. CDT Monday. All sales under the program were still scheduled to end Monday evening.
Dennis Jungmeyer, president of the Arkansas Automobile Dealers Association, said Monday that he didn't know of any Arkansas dealers still participating in the cash for clunkers program.
"We have cautioned dealers that by waiting to the last minute to consummate sales, our prediction is that [at the deadline] there could be literally 200,000 invoices submitted simultaneously, " Jungmeyer said. "And if [a dealer's invoice] bounces back, there may be no way of knowing if they are qualified."
It has been the experience of Arkansas dealers that about three out of four deals that are submitted are rejected, some for no specific reason, Jungmeyer estimated.
"And as soon as [the rejection] happens, you go to the back of the line," he said.
Several dealers contacted Monday said they had ceased offering the program discounts last week.
"We haven't been doing them since Friday morning," said Frank Fletcher of North Little Rock, who owns dealerships in Sherwood, Northwest Arkansas, Jonesboro and Joplin, Mo. "If anyone is still doing it, you need to call the insane asylum and put them in it. Even when you submit something, the computer system has been blowing up for two or three days. They've been so overloaded you can't even submit stuff."
Kent Dobbs, the owner of two Hyundai dealerships in Northwest Arkansas, said Monday that he stopped seeking cash-for-clunker deals July 31 partly because of concern over reimbursement. The program started July 27.
"I've not gotten paid for any of them,'' Dobbs said of the 23 vehicle sales approved for the gas mileage rebate. "I probably could have sold 80 to 100 cars, but I chose not to because the sales eat up your cash flow."
The deadline change came after government computers set up to handle the filings buckled under a flood of dealers trying to send in their sales agreements at the last minute. Under the original plan, those deals that weren't submitted on time wouldn't be repaid, leaving many dealers fearful that they would be left on the hook for clunker sales they made.
"The computer system has been down or very slow for most of this day, and we literally have thousands of dealers with probably millions of deals that they would like to submit and just have been unable to," said Michael Harrington, chief legislative counsel for the National Automobile Dealers Association.
Computer problems have plagued the program, as it proved far more popular than government officials expected. A rush of filings also bombarded the online system earlier this month when it appeared the first $1 billion Congress set aside would run out just days after sales began. Transportation Department officials later expanded its computer network capacity and tripled the number of staff members working on the program.
The big rush of filings on Monday, however, shut down the filing system temporarily.
The computer system was overloaded and did not function for much of the day, said Andy Graff, director of sales for Galpin Motors in North Hills, Calif.
"Their site is down all day [Monday]," said Andrew Gill, the owner of Dallas Dodge Chrysler Jeep in suburban Atlanta. "We have been paid on one deal and have approximately 25 pending. This is a disgrace."
Alan Starling, who owns two General Motors dealerships in central Florida, said his staff was still trying to submit all the paperwork for 75 deals through the clunkers program.
"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," Starling said.
Transportation Secretary Ray LaHood, speaking to reporters in Norristown, Pa., earlier in the day, 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 today, "there will be 700,000 to 800,000 cars that have been sold, most of them fuel-efficient," replacing gas-guzzling cars and trucks.
Transportation officials said that, through early Monday, dealers had submitted 625,000 vouchers totaling $2.58 billion. Many car dealerships have worked overnight in recent days to submit the 13-page application to be reimbursed for the trade-in vehicle, including the title, proof of registration and proof of insurance.
Dealers have only received a fraction of the reimbursement funding. Through last Thursday, the most recent data available,the Transportation Department had reviewed and processed more than 150,000 reimbursement applications and approved $140 million in payments to dealers.
Cash for clunkers has been 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 receive rebates of between $3,500 and $4,500, depending on the improvement in fuel efficiency from their old vehicle to their new one.
Information for this article was contributed by Ken Thomas, Stephen Manning and JoAnn Loviglio of The Associated Press, David Smith and Laurie Whalen of the Arkansas Democrat-Gazette and Vivek Shankar and Mike Ramsey of Bloomberg News.
Front Section, Pages 1, 8 on 08/25/2009