Conventional wisdom says that Cash for Clunkers provided a big-time boost to dealers. After all, before Clunkers, most showroom floors were bereft of customers, and scores of dealerships were closing their doors. As good as C4C has been for customers, many dealers are all too happy it's over.
A recent (admittedly unscientific) survey conducted by Automotive News shows that 44% of the 800 dealers polled wouldn't want C4C to be extended again, even if the program was modified. Only 3% felt that the program should have been extended without being modified. The biggest issue dealers have with C4C is, unsurprisingly, its lack of timely payment. Some multi-store dealers have millions invested in the program, while little or no money has come in yet. An alarming 23% of dealers say they have had to borrow money to cover the cash crunch left in the wake of the Clunkers program, while an additional 10% say the program has actually sucked enough cash from the coffers that it has put the dealership at risk.
The Transportation Department and the Obama Administration have stated that every eligible C4C transaction will result in payment, but the federal guarantee isn't boosting many dealers' confidence. AN says that 43% of dealers surveyed aren't very confident that they'll receive all of their C4C dollars, while an additional 18% are not at all confident that they'll be paid in full.
Some dealers say that C4C has also hurt their repair, finance, used car and parts businesses, but that's okay if they collect from the feds. Even with the considerable downside of C4C, 74% of dealers say that if they're paid in full by the federal government, the program will positively affect their bottom line, while 5% say they somehow managed to lose money.
Cash for Clunkers officially ended last night at 8 pm.
[Source: Automotive News - Sub. Req. | Image Source: Ethan Miller/Getty]