Feds Slow to Pay Dealers; Automakers Offer Incentives for Clunkers

Though the CARS program (aka Cash for Clunkers) still has about half of its funding available, a number of news outlets are reporting that some dealers have suspended clunker sales due to lack of payment from the government. The popularity of the program along with a few clerical errors has caused a backlog in clunkers applications, which is delaying the payout process. Numerous dealers are claiming that they are owed credits deep into the six figures.The Obama administration is expected to announce a wind-down strategy in the next few days to ensure that dealers will receive their funds.

This may make it slightly harder for consumers to find participating dealers, but savvy shoppers can take advantage of new incentives that utilize the cash for clunkers credit.

Saturn, under stewardship from its new owner Roger Penske, is offering a dealer cash allowance ranging from $2,500 to $3,500. This is the highest cash on the hood ever for Saturn, and if you combine this with the cash for clunkers credit, you can potentially save up to $8,000 off the price of a new vehicle. Just keep in mind that dealer cash differs from customer cash. Since this type of incentive is focused more on the dealer, it is up to their discretion to determine how much of the allowance they will share with you. The dealer isn't obligated to give you the maximum amount.

Toyota, Nissan, and Volkswagen have announced a set of lease incentives this month, which utilize the cash for clunkers credit to offer low monthly payments. In order to qualify, you must agree to a 60 month lease. These five-year leases are rarely offered by automakers and may disappear when the cash for clunkers program ends. Though a low payment lease may seem tempting, we don't recommend getting into a five-year lease due to the extra costs associated with it.

Take a look at our Incentives and Rebates page for more details and a list of all available incentives.

Posted by

Ron Montoya August 19, 2009, 2:00 PM

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