Dallas—The popular Cash for Clunkers program is under fire by skeptics who question just how well the government program to get older cars and trucks off the roads is really working.
Gabriella Pate traded in a 9-year old model for a new Toyota Highlander as part of the rebate program. She is worried she may not be able to keep her $3500 rebate because of the paperwork she was required to sign. "They make you sign a statement that says you will reimburse the dealer for the rebate, if the dealer doesn't get paid by the government".
Some jittery car dealers are now requiring customers who take part in the program to sign waivers guaranteeing the rebate will be refunded if Uncle Sam doesn't reimburse the dealer for the cash. The waivers started popping up as it became apparent that the program would quickly run out of cash despite a billion dollars in funding.
"It has been named the Cash for Clunkers, but we are calling it the Cash for Clusters", says a North Texas car dealer who did not want to be identified. The dealer, who owns one of the highest volume lots in the area, says he is worried about being reimbursed by the federal government for the rebate dollars he has already paid. "I am almost $300,000 in the hole and we have yet to see a dime in reimbursement. I find it hard to sleep at night, wondering if I am going to be paid", says the car dealer.
Other dealers too are concerned the cash-strapped program is too short on funding. Some dealers say they are suspending sales under the program until there are guarantees the government will meet it's IOU's. But, some say despite some speed bumps the program is still having a positive impact on the economy. "there is a backlog, but they will work through it", says Drew Campbell with the New Car Dealer's Association. "It will be just the jump start the car industry and others need".