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Dealerships await Clunkers' payout

August 24, 2009 12:00:00 AM PDT
The deal behind the Cash for Clunkers program was this: trade in an old, so-called "clunker," buy a brand new, fuel-efficient vehicle, and the government will give you a $4,500 rebate.Of course the dealer had to front that $4,500 until the government pays.

"Now we're all on the hook until we get paid," said Riverside Metro Auto Group owner Ron Michaelson.

The government owes Michaelson nearly $1 million, and he has no idea when he'll get paid.

"So there's a lot of liability there for a lot of smaller dealers," he said, "I don't think they'll be able to withstand this holding pattern until they get paid by the government."

At Hatfield Buick, a smaller dealer in Redlands, the Cash for Clunkers program has hardly been overwhelming; they've only made seven Cash for Clunker deals.

A part of the problem is that so many people just didn't qualify according to the 136-page book of requirements. Then there were the technical difficulties with the government Web site.

However, despite the problems, many dealers told Eyewitness News that overall the program was a success, if only because it brought more buyers through the front door.

"You know, I think the big success of it was it woke up the marketplace, it got people out here looking for cars, it got people sitting around their kitchen table in the morning talking about Cash for Clunkers, and that got them to come down and look for a car," says Hatfield Buick owner Bill Hatfield.

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