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Top Stories
Administration Plans to Wind Down Clunkers Program
Dealers at Risk in Making Further Clunker Deals, NADA Says
GM to Advance Funds to Dealers Waiting for Clunker Rebates
NY Dealers Pull Out of Clunkers Program
Large Dealership Groups Owed Millions for Clunkers
Waiting on Uncle Sam
End of 'Cash for Clunkers' Doesn't Mean Output Cuts
Chrysler Cuts Powertrain Warranty to 5 Years
GM Cancels 'Hideous' Buick SUV After Would-Be Customers Twitter
Top Stories
Administration Plans to Wind Down Clunkers Program

WASHINGTON -- The Obama administration is developing plans to wind down the popular Cash for Clunkers program and could announce by Friday when the incentives will no longer be available. The incentives have generated more than 435,000 vehicle sales but dealers want a clear plan on when the rebates will no longer be available so they don't end up on the hook for any of the incentives. The National Automobile Dealers Association said its trade group met with Transportation officials to discuss dealer concerns about reimbursement delays and ways of fixing the problems. NADA spokesman Charles Cyrill said the association "stressed the importance of addressing - as soon as possible - how the program will end, including the possible suspension of the program."
Source: The Associated Press

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Dealers at Risk in Making Further Clunker Deals, NADA Says

WASHINGTON -- The National Automobile Dealers Association warned members that they may not be reimbursed by the government for any more cash-for-clunkers deals, arguing that some transactions could take place after the program's $3 billion has been depleted. "It is important to note that NHTSA has confirmed elsewhere that if the program's money runs out before a dealer is reimbursed, that dealer will not be paid," an NADA statement said. "Dealers who accept additional 'clunker' deals face a growing risk that they may not be reimbursed."
Source: Automotive News

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GM to Advance Funds to Dealers Waiting for Clunker Rebates

DETROIT -- General Motors Co. will help cash-strapped dealers waiting for cash-for-clunker rebates by advancing them a 30-day interest-free loan in the amount of rebates that are being processed. GM said it is providing the money so dealerships will have the liquidity to run their businesses and continue to deliver vehicles to GM customers. GM will offer the loan for any clunker deal deemed by the dealership to qualify, whether or not the government has given formal approval. The dealer must repay the loan within 30 days or GM will take the money owed back from the dealer's open account with the automaker, said spokesman John McDonald.
Source: Automotive News

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NY Dealers Pull Out of Clunkers Program

Hundreds of auto dealers in the New York area have withdrawn from the government's Cash for Clunkers program, citing delays in getting reimbursed by the government, a dealership group said Wednesday. The Greater New York Automobile Dealers Association, which represents dealerships in the New York metro area, said about half its 425 members have left the program because they cannot afford to offer more rebates. "[The government] needs to move the system forward and they need to start paying these dealers," said Mark Schienberg, the group's president. "This is a cash-dependent business."
Source: The Associated Press

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Large Dealership Groups Owed Millions for Clunkers

Large dealership groups say the federal government owes them millions of dollars for the cash-for-clunkers program. Sid DeBoer, president of Lithia Motors Inc. says his group sold about 1,800 vehicles under cash-for-clunkers and has been paid for about 70 of those deals. He says the government owes the group more than $6 million. Dave Cosper, CFO of Sonic Automotive Inc., the nation's third-largest dealership group, said the group has been paid $400,000 to $500,000 from the government for cash-for-clunkers deals, but is still owed close to $20 million. "We can handle it because we have some funds, but that is a very large number, even for us," Cosper says.
Source: Automotive News

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Waiting on Uncle Sam

Since Cash for Clunkers started in late July, Monument Chevrolet has sold 42 vehicles to people who took advantage of the incentive program, the Pasadena, [Texas], dealership's owner Carroll Smith said. There is just one problem for Smith. He hasn't yet been paid by the federal government for any of those transactions. “It's a huge issue right now,” said Dale Early, owner of Deerbrook Forest Chrysler Jeep. “A guy who does a number of transactions in a short time — it's a huge financial burden,” he said: “The government was not prepared to handle the volume.”
Source: Houston Chronicle

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End of 'Cash for Clunkers' Doesn't Mean Output Cuts

The “cash for clunkers” incentive program may be winding down, but that doesn’t necessarily mean the auto makers will face cutbacks in production. In a recent research note, Steven Wieting of Citigroup points out that auto sales already had seemed to have found a bottom before cash for clunkers went into effect in July. “The production pace is still indicative of falling, not rising inventories,” Wieting said. “The assembly pace is likely to be significantly higher still in coming months. With it, the benefit to U.S. output is likely to be felt even if vehicle sales fall back some after Cash for Clunkers goes to the clunker itself.”
Source: The Wall Street Journal

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Chrysler Cuts Powertrain Warranty to 5 Years

Automaker drops lifetime guarantee
Chrysler Group LLC said Wednesday that it is dropping its lifetime powertrain warranty in favor of a 5-year, 100,000-mile guarantee. Chrysler spokesman Rick Deneau said the decision was driven by market research that showed consumers prefer warranties with a fixed time period. The 5-year, 100,000-mile warranties will be transferable to new owners if the vehicles are sold before they run out, he said. The previous lifetime warranties were not transferable.
Source: Detroit Free Press

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GM Cancels 'Hideous' Buick SUV After Would-Be Customers Twitter

General Motors Co. said it canceled plans for a Buick sport-utility vehicle announced Aug. 6 after potential customers said in person and online that the model lacked luxury touches they expect of the brand. “We were all struck by the consistency of the criticism,” [Vice Chairman Tom Stephens said yesterday on a company blog.] “It didn’t fit the premium characteristics that customers have come to expect from Buick.” Negative feedback spread on Twitter Inc.’s site after users began calling the vehicle a “Vuick,” a reference to GM’s Saturn Vue that provided the basis for the Buick.
Source: Bloomberg News

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Quotable
 
"It is important to note that NHTSA has confirmed elsewhere that if the program's money runs out before a dealer is reimbursed, that dealer will not be paid. Dealers who accept additional 'clunker' deals face a growing risk that they may not be reimbursed."

    -- NADA statement issued Wednesday on the wind down of the "cash for clunkers" program, Automotive News, Aug. 20


The government "needs to move the system forward and they need to start paying these dealers. This is a cash-dependent business."

   
-- Mark Schienberg, president of the Greater New York Auto Dealers Association, who said Wednesday hundreds of dealers in the New York area have withdrawn from the "clunkers" program, The Associated Press, Aug. 20


"A guy who does a number of transactions in a short time — it's a huge financial burden. The government was not prepared to handle the volume."

   
-- Dale Early, owner of Deerbrook Forest Chrysler Jeep, Houston Chronicle, Aug. 20



"I've got payroll and I've got taxes to pay and all those things."

   
-- Michelle Primm, managing partner of a four-franchise dealership in Cuyahoga Falls, Ohio, has stopped making deliveries on "clunkers" purchases until the sales are approved by the federal government, The Associated Press, Aug. 20
Video Highlights
 

Keep or Scrap Cash for Clunkers? 
(CNBC)


Dealers, Detroit Look for Boost From 'Clunkers' (PBS)



Helping Dealers Left Out of New GM (Fox Business)



Media Coverage: The Tragedy of Dealer Closings (NADA-TV)



NADA's New Buy Now Campaign



No Dent in Demand for Some U.S. Cars (NBC)



Cutting Dealers a Mistake (Fox Business)



NADA on Floorplan Credit Crisis (NADA-TV)


John McEleney's Testimony to Senate Committee (CNBC)
 Senate Testimony on Floorplan Loans (NADA-TV)
 Banks Turning on American Car Dealers? (WTNH-TV)
 NADA Tackles Industry Crisis (NADA-TV)
 McEleney Speaks at NADA Convention (NADA-TV)
 Demise of Dealerships Leaves Big Dent (NBC)
NADA on the Front Lines  (NADA-TV)


Click here for more video reports.

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