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Cash for Clunkers UPDATE: Government says it will pay most clunker claims by Sept. 30

WASHINGTON — The Obama administration expects to take until the end of the month to pay properly completed claims under the cash-for-clunkers program, a government official said today.

“We plan to pay all eligible and complete dealer submissions by September 30,” a Transportation Department official said.

The agency didn’t release an official figure of how many dealer submissions have been paid. A National Automobile Dealers Association survey released yesterday found that 5.7 percent of dealer submissions had received rebates.

“The new deadline is encouraging but still longer than we’d like,” NADA Chairman John McEleney said in an interview today.

About 120,000 claims for $500 million have been approved thus far, or about 17.3 percent of the total, the Transportation Department official said.

The agency said it expects to approve up to $100 million a day in claims by the end of next week.

Claims that are approved still have to go to the Treasury Department for final processing, and many dealers have complained that their submissions have been approved but not paid.

At a congressional staff briefing today, Transportation officials pledged that payments to dealers would start being wired within three days of approval of their applications, said a Senate aide who attended the briefing.

Some dealers expressed skepticism that the administration would be able to abide by its new promises.

“I’m making book and laying odds 3-to-2 that the government will not have paid more than 50 percent of all Clunker claims by Oct. 1,” Earl Stewart, a Toyota dealer in North Palm Beach, Fla., said in an email.

Stewart said he is owed $1.1 million in rebates and has been paid $226,000.

The department plans to increase the number of federal and contract employees processing dealer claims to 5,000 from about 2,000 by the middle of next week, the official said.

“We don’t know how well-trained they are,” McEleney said. “It’s been frustrating.”

The deadline for dealer submissions was Aug. 25. Under law, those submissions are supposed to be paid by tomorrow.

Transportation Secretary Ray LaHood has attributed the source of reimbursement delays to incomplete or improper dealer claims.

“We continue to work with dealers to educate them on how best to improve the quality of their resubmissions,” the department official said. “Multiple reviews slow the process and keeps dealers from getting paid.”

Dealers are allowed to resubmit rejected claims after the Aug. 25 deadline.

Article courtesy of Neil Rowland, Automotive News

John Paul Strong

John Paul Strong combines his two decades of automotive marketing experience with a team of more than 150 professionals as owner and CEO of Strong Automotive.

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