NADA asks U.S. to suspend clunkers program

National Automobile Dealers Association officials asked the government to suspend the cash-for-clunkers program because a survey by the group found that the $3 billion fund has been exhausted, NADA Chairman John McEleney said.

"We asked them to put a halt to the program--I think we said 'very soon'--but a suspension at midnight tonight would make sense," McEleney said in an interview Wednesday. "Our survey opened the eyes of the Transportation Department."

A suspension would allow dealers to submit all pending claims and permit the government to process them so that a precise determination could be made of how much money, if any, is left in the program, he said.

NADA conducted an informal electronic survey of its 18,000 members earlier this week, McEleney said. A limited number responded, and the findings were extrapolated, he said.

Transportation has been conducting its own dealer surveys. Federal and NADA officials are comparing notes, using the two sets of findings to draw conclusions about funding availability, McEleney said.

'That dealer will not be paid'

Later Wednesday, NADA 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," the NADA statement said. "Dealers who accept additional 'clunker' deals face a growing risk that they may not be reimbursed."

Transportation spokeswoman Jill Zuckman declined to comment directly on McEleney's remarks.

Transportation Secretary Ray LaHood said earlier Wednesday that he would announce in the next few days a strategy for winding down the program so dealers aren't left holding the bag for vouchers paid to customers.

The agency will rely on its own twice-a-week surveys of dealers as well as other unidentified surveys, he said.

"We can make a pretty good judgment call," LaHood said at a news conference. "I know dealers are frustrated, but they're going to get paid."

Claim tally

The Transportation Department has said that 411,624 dealer claims for $1.72 billion had been filed as of the morning of Tuesday, Aug. 18.

The difference between that claims figure and the $3 billion total may be accounted for largely by rejections of dealer applications that had not yet been resubmitted, McEleney said.

The dealer backlog of claims that had never been submitted was relatively small, he said.

Among the questions asked in the survey were how many cars were sold under the program, how many claims had not been submitted, and how many claims had been filed but rejected, McEleney said.

D

By Neil Roland- Automotive News