Transportation Secretary Ray LaHood kicking off the 'Cash for Clunkers' program in July.
General Motors says it will begin advancing dealers the cash the government owes them under the Federal Cash for Clunkers Program. GM made the announcement today after a number of dealers said they were dropping out of the program because of delays in being reimbursed. GM said its recent sales have surpassed expectations largely due to the federal program. On Tuesday, they announced plans to ramp up production.
The Greater New York Automobile Dealers Associations said yesterday that their dealers have only been compensated for about two percent of the deals already made under the program. Some dealers say they've been waiting so long, they don't have have enough cash to give out new rebates. Over 200 New York area auto dealers have already left the program because of the delays.
Speaking at a Mothers Against Drunk Driving event yesterday, Transportation Secretary Ray LaHood addressed the issue, saying that dealers are "...going to get the money. We have the money. Congress provided the money."
He also said that his department doesn't have the processing power to handle the sheer number of claims they've received, something he attributes to the program's success. The department has hired thousands of temporary workers to handle the claims, in an attempt to speed up the process.
Still, LaHood told reporters today that the program won't last forever — it's set to run out of money by Labor Day, and LaHood said he'd announce plans to wind it down on Friday.
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