Reid pressures Obama administration to hasten ‘Clunkers’ refunds
“This program has had a significant stimulative effect on the sale of cars in the U.S., and dealers have submitted hundreds of thousands of vouchers for processing,” Reid wrote in the letter. “In order to capture a sale…dealers have been forced to effectively finance the CARS vouchers for buyers until the dealers are reimbursed by the federal government.”
The Nevada Democrat warned that slow reimbursements could hurt sales at participating dealerships.
Reid also took to Twitter to publicize the announcement:
Sent a letter to Sec LaHood urging him to expedite reimbursements to auto dealers participating in Cash for Clunkers http://bit.ly/Ck4TC
Full text of the letter is below:
Dear Secretary LaHood:
I am writing to request that the Department of Transportation take additional steps to expedite reimbursements to U.S. automobile dealers for vouchers issued to consumers under the Car Allowance Rebate System (the “CARS” or “cash for clunkers” program).
As you well know, this program has had a significant stimulative effect on the sale of cars in the U.S., and dealers have submitted hundreds of thousands of vouchers for processing. In order to capture a sale but also make use of the CARS incentive, dealers have been forced to effectively finance the CARS vouchers for buyers until the dealers are reimbursed by the federal government, placing a strain on dealers’ balance sheets that, if prolonged, could eventually offset some of the benefits of the program. Indeed, I was disappointed to learn of reports that many dealers are no longer participating in the program due to these concerns.
I recognize the CARS program’s success perhaps has placed unexpected burdens on the Department, and I appreciate your decision earlier this week to increase the number of staff devoted to processing voucher submissions. I also appreciate your public remarks this week assuring dealers that properly submitted vouchers will be honored and appropriate notice provided to announce the termination of the CARS program, thus preventing the program from running out of money before all vouchers could be honored.
Notwithstanding these assurances, I believe that even more certainty must be provided to dealers who participate in the program to ensure its continued success. For example, the Department should consider implementing a policy providing that all properly submitted vouchers will be reimbursed within five business days, and continue adding staff and devoting resources as needed to meet this timeline. By adopting such a guideline, dealers will be more willing to place their capital at risk to carry the cost of CARS vouchers until reimbursement, and more dealers will continue participating in the program, thereby maximizing the program’s objectives.
I appreciate your consideration of this matter and look forward to your response.
Sincerely,
Harry Reid (D-Nev.)
Cross-posted to the Briefing Room