When Cash for Clunkers was announced, most everyone was so fixed on government subsidies and the potential for a sales uptick that one big obstacle was apparently largely overlooked. How and when would dealers get paid? A couple weeks after the program officially ended, we're beginning to get an idea, and the answer is "slowly." According to Automotive News, a survey by the National Automotive Dealers Association on August 27 says that only 5.7% of all clunker transactions have been reimbursed. That's but a fraction of the nearly 700,000 overall C4C deals, a number that has dealers around the country smarting. Michigan Representative Michael Rogers reportedly told Automotive News that he asked the Transportation Department about the 5.7% number, and the department countered that it thought the number was closer to 10%.

Anyone looking for the pace of Clunker reimbursements to uptick will likely be disappointed as well, as the study also shows that 83.7% of all clunker apps are still under review. Further, 6.3% of claims have reportedly been rejected, and NADA says that the dealers aren't even being given a reason why. The Obama Administration insists that all approved C4C transactions will be reimbursed, while rejected claims can be resubmitted. While it's no surprise that the government isn't able to move quickly to reimburse dealers, it does astound that the apparent administrative incompetence of C4C cost $100 million.

[Source: Automotive News - subs req'd | Image: Justin Sullivan/Getty]

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