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Dealers take clunkers; now wheres the cash?
Hayes Chrysler employee Andy Lindman pours a solution of sodium silicate into the engine of a clunker Thursday afternoon as the Oakwood car dealer executes one of the vehicles taken in during the Cash for Clunkers program. The solution seizes the engine, making it unusable before scrapping.

Following a whirlwind of sales during the Cash for Clunkers program, many local dealerships still are waiting to get paid by Uncle Sam.

The federal program offered consumers a break of between $3,500 and $4,500, depending on the vehicle, to buy a new, fuel-efficient car when exchanging a “clunker” to be scrapped.

But now that sales are complete, dealerships are left waiting for that $3,500 to $4,500 rebate promised by the U.S. government.

Wayne Alexander of Hardy Chevrolet, 2115 Browns Bridge Road in Gainesville, called the program an “administrative nightmare.”

“On the 40 vehicles I’ve got (under Cash for Clunkers), I’ve been paid on one,” Alexander said. “That’s our operating money that’s tied up.”

Alexander said though the program generated traffic and new sales for his dealership, it also created a lot of work. Because of the time it takes to submit the paperwork, Alexander stopped clunker sales Aug. 22 though the program didn’t end until Monday, two days later.

“I cut it off early,” Alexander said. “I probably missed some sales but I can’t stand to lose $3,500, $4,500.”

The popular Cash for Clunkers program generated nearly 700,000 new car sales during the past month, giving the U.S. auto industry a jolt of activity during the deepest decline in auto sales in two decades.

The government released final data on the car incentives, and said dealers submitted 690,114 sales totaling $2.88 billion, bringing the program to a close under its $3 billion budget.

Congress added another $2 billion to the original $1 billion budget when the first pot of money nearly ran out in a week. The extra money was supposed to last through Labor Day, but the funding only lasted about a month.

The biggest beneficiaries were Japanese automakers Toyota, Honda and Nissan, which accounted for 41 percent of the new vehicle sales. Detroit automakers General Motors, Ford and Chrysler had a share of nearly 39 percent.

Toyota led the industry with 19.4 percent of new sales, followed by GM with 17.6 percent and Ford with 14.4 percent.

The Toyota Corolla was the most popular new vehicle purchased under the program. The Honda Civic, Toyota Camry and Ford Focus held the next three top spots. All four are built in the United States.

Mark Boggs, new car manager for Milton Martin Honda, 2420 Browns Bridge Road in Gainesville, said the program brought in many new consumers to look at fuel-efficient Civics and Accords.

“We feel that this brought people to buy Hondas that may never have bought a Honda before,” Boggs said. “(Honda) was a perfect fit for the program.”

Boggs said his dealership sold 124 cars under the program and has received government funding for five, which accounts for roughly half a million dollars yet to be paid.

“It’s always going to be a cash flow concern,” Boggs said. “But you have to be prepared if you’re going to participate.”

Boggs said he knew going in that the government program was going to be a slow one that would involve many more steps than the typical sale.

“We actually had a team to submit those to the CARS program,” Boggs said. “There was a lot of hard work and a lot of extra hours making sure it was a smooth process.”

Making the sale is only the first step of the Cash for Clunkers program. Once dealers are paid by the government for their sales, they are required to pour a sodium silicate solution, known as liquid glass, into the engine to seize it.

Tim Hayes, general manager of Hayes Chrysler Dodge, 3115 Frontage Road in Gainesville, disabled the first two of the 32 clunkers he traded under the program.

“When I get paid, I destroy the cars,” Hayes said.

Hayes said one drawback to the program is that there will be a shortage of affordable used cars on the market. He said one of the cars he destroyed last week was a 1994 Chevrolet Suburban that would have made a decent used car for someone without much money.

“There’s over 600,000 cars off the road now,” Hayes said. “That’s going to hurt some people. Those cars are going to go away.”
Hayes said he sold out of models like the PT Cruiser and the Patriot during the Cash for Clunkers program.

He stopped sales under the program Friday before the Monday deadline, both because most of the models that qualified for the program were out of stock and because he didn’t want to take the chance of filing the paperwork too late.

“It’s been an interesting month ride,” Hayes said of the program.

Following the interest in the Cash for Clunkers program, other industries are looking to create similar programs.

This year’s stimulus bill funded a $300 million program that will offer rebates of varying amounts, possibly up to $200, to buyers of energy-efficient appliances and other products that carry the “Energy Star” label.

Rebates will go to buyers of energy-efficient appliances like freezers, refrigerators, furnaces and central air conditioners.

Plans for the programs, including which products qualify and how much the rebates will be worth, are due back to the federal government by Oct. 15. The Department of Energy estimates that the full $300 million will be awarded by the end of November, and consumers should start to see the rebate programs in stores later this year or early next year.

The Associated Press contributed to this report.