BRADENTON — Cash for Clunkers is out of gas.
The Obama administration plans to end the $3 billion program Monday as consumer demand is stressing funds for the government rebates of $3,500 and $4,500 that are issued to consumers who trade in older vehicles for new, more fuel-efficient models.
Many car dealers have yet to receive the government’s reimbursements for rebates they’ve issued up-front since the program started in late July.
Some Manatee County dealerships are owed from $41,000 to as much as $200,000. Still, local dealers were disappointed Thursday to learn the program will end at 8 p.m. Monday.
“I think it will definitely be damaging to the economy,” said Ed Dreyer, manager of Firkins Chrysler in Bradenton. “It has been a good stimulus to us, and by them backing out now, it will slow things down to where it was before.”
The program has generated at least 457,000 vehicle sales and has exhausted about $1.9 billion of the funds for the program. From the start, the program was surrounded with confusion over how much money remained.
Car dealers report delays and backlogs in the system where they had to register their clunker deals to collect rebates. That prompted the Senate earlier this month to pump an additional $2 billion into the program that originally received $1 billion.
Firkins Automotive Group of Bradenton has yet to be reimbursed for any of its rebates.
Cash for Clunkers has generated 15 new vehicle sales for Firkins Chrysler and 31 new vehicles for Firkins Nissan.
While the government owes Firkins at least $161,000 in rebates, Dreyer said the dealership plans to continue the program.
“The government has not funded us yet, but we are a viable dealer,” Dreyer said. “It’s not hindering our business, and we’re sure the government is going to pay us.”
The government owes Red Hoagland Pontiac GMC at least $41,000 based on the 12 cars it has sold.
“I’ve had 2 percent reimbursement,” said Mike Fulford, sales manager. “Everybody I know is at 0 percent.”
Before the government announced it would end the program, Fulford said the dealership wasn’t sure how long it would be able to participate because of the reimbursement delays.
Now, Fulford said, the dealership will still participate in the program until the 8 p.m. Monday deadline.
“At least they’re giving us time to get all of our deals that we’re working on and get them handled,” Fulford said. “We appreciate that they put the program in place because it did stimulate business.
“They’re probably making the best decision to end the program,” he added. “My suspicion is it’s got a lot of problems internally.”
The program’s $3 billion was on track to be exhausted in September.
But the Transportation Department found many applications that were inaccurate or incomplete. That contributed to reimbursement delays and doubt over how much additional money would have to be issued to dealers who corrected the applications.
Car dealerships also are reporting low inventories as a result of the program because they did not have the money to reorder stock as they waited on rebates.
Matt Woods, owner of Honda Cars of Bradenton, said the program has reduced new vehicle inventory at his dealership after it generated 52 sales.
But his inventory is still sufficient enough to continue the program, he said.
The bigger issue is the more than $200,000 that the government owes Honda Cars of Bradenton.
“It can affect your working capital and daily cash flow,” Woods said. “For a smaller dealer, it hurts a lot more.”
— The Associated Press contributed to this report.