Is the government's program proving to be too popular? Sales at many dealerships are going through the roof with many reporting selling more than a hundred vehicles in the program's first few days.
Dealers essentially are having to front the cash for the $3,500 - $4,500 vouchers and probably won't receive reimbursement money from the government for several days. The government has 10 days from the time deals are approved to electronically submit money from cash-for-clunkers into dealer accounts.
The problem is, dealers have to scan, create PDFs and electronically submit at least 20 documents for each deal for the National Highway Traffic Safety Admin. to approve it. Many dealers are reporting deals are being rejected for incomplete or incorrect information. The rules published by NHTSA last week consist of a 135 page document and filled with legalese, so mistakes and misunderstandings are bound to happen.
Another problem is that dealers often are unable to log onto the government website to submit the paperwork.
In other words, dealers may be waiting a while for the money -- and with so many dealers having cash flow and credit issues today they'll have to be careful they don't clunk themselves out of business.
Nonetheless, the incentive is a big hit and inventory is flying off dealers' lots, so dealers are willing to put up with some frustration.