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Some Dealers Stop Taking 'Clunkers'

The Cash for Clunkers has highlighted an aspect of the auto industry that's rarely focused on -- what happens to a car after it dies?

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By Dana Hedgpeth
Washington Post Staff Writer
Friday, August 21, 2009; 7:45 PM

Some car dealers stopped accepting new vehicles under the U.S. government's "Cash for Clunkers" program Friday because they said they want time to finish processing their paperwork before it shuts down Monday.

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The program, which gave consumers vouchers worth up to $4,500 toward the purchase of a new, more fuel-efficient vehicle when they traded in a gas guzzler, has been considered a success by the Obama administration for stimulating the downtrodden auto industry. But the $3 billion program has nearly run out of money since it started a month ago and government officials said they would shut down the effort at 8 p.m. on Monday.

Auto dealers have made 489,269 sales under the clunkers program, according to data released Friday by the Department of Transportation. The total value of the rebates claimed by dealers is at $2 billion.

The program requires dealers to essentially front the rebates until they get reimbursed from the government. But many dealers have not yet been reimbursed. On Friday, many found it difficult to even reach the Web site for filing paperwork, perhaps because of the crush of submittals. The delays prompted the National Automobile Dealers Association to push the government to extend the deadline beyond Monday night for accepting paperwork.

Still, many dealers are not taking a chance.

Auto Nation, the biggest U.S. auto retailer in the country, said it stopped the clunkers program Friday night to make sure it had enough time to get its deals through the government's system. It is owed about $45 million for sales from the government.

Tammy Darvish, one of the largest car dealers in the Washington region, with more than two dozen stores, said she had 30 employees trying to input 400 applications into the government's site. She put up a notice on the company Web site Friday morning, stating she would not accept any more clunker deals after midnight Sunday so that her staff could process the sales they've done so far.

Darvish said the government's closing the program has meant "they've pushed the panic button," as consumers came to her dealerships Friday. She said she took in 69 clunker trade-ins. Since the program kicked off July 24, she taken in more than 1,300 clunkers and is owed $5.5 million from the government.

Other auto dealers said they were preparing for a last-minute rush of customers coming in over the weekend to get the clunker deal, even as some are short on inventory.

"We're expecting an onslaught of people," said Geoff Pohanka, who has 15 dealerships around the region.

The Associated Press and Bloomberg contributed to this report.


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