Some NY dealers pull out of clunkers program

(AP) - Hundreds of auto dealers in the New York areahave withdrawn from the government's Cash for Clunkers program,citing delays in getting reimbursed by the government, a dealershipgroup said Wednesday.

The Greater New York Automobile Dealers Association, whichrepresents dealerships in the New York metro area, said about halfits 425 members have left the program because they cannot afford tooffer more rebates. They're also worried about getting repaid.

"(The government) needs to move the system forward and theyneed to start paying these dealers," said Mark Schienberg, thegroup's president. "This is a cash-dependent business."

The program offers up to $4,500 to shoppers who trade invehicles getting 18 mpg or less for a more fuel-efficient car ortruck. Dealers pay the rebates out of pocket, then must wait to bereimbursed by the government. But administrative snags and heavypaperwork have created a backlog of unpaid claims.

Schienberg said the group's dealers have been repaid for onlyabout 2 percent of the clunkers deals they've made so far.

Many dealers have said they are worried they won't get repaid atall, while others have waited so long to get reimbursed they don'thave the cash to fund any more rebates, Schienberg said.

"The program is a great program in the sense that it's creatinga lot of floor traffic that a lot of dealers haven't seen in a longtime," he said.

"But it's in the hands of this enormous bureaucracy andregulatory agency," he added. "If they don't get out of their ownway, this program is going to be a huge failure."

The program is administered by the Department of Transportation.Transportation Secretary Ray LaHood said Wednesday that dealerswill be repaid for the clunkers deals they have completed.

"I know dealers are frustrated. They're going to get theirmoney," LaHood told reporters. He said the Obama administrationwould soon announce how much longer the $3 billion car incentiveprogram will last.

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