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“Cash for Clunkers” Suspended One Week In

And these guys want to take on Health Care…

WASHINGTON — The government suspended its $1 billion ‘cash for clunkers’ program Thursday night amid worries about slow processing of sales deals, dealer confusion — or even fears it may run out of cash months before it was due to expire.

Dealers loved the extra sales, but some were already getting cold feet about the deals because of the difficulty in processing them.

One dealer was going to suspend anyway. Another says he’s having to haul clunkers back to his lot that he already shipped to the junkyard just to disable them. Others say deals are being held up by red tape.

Cash for clunkers is the best-known name for the big government program that began this week to offer $3,500 or $4,500 incentives to owners of old gas guzzling vehicles who trade them in on more fuel-efficient ones. It is intended to spur moribund auto sales, helping both dealers and manufacturers.

But rules governing the program totaled 135 pages. They required dealers to register and many started off the week just trying to get answers on a government-jammed website. The rules are “very confusing,” says Pete Greiner, who has a Ford dealership that bears his name in Casper, Wyo. “The administration of the program is extremely tough.”

As of 6:30 p.m. ET Thursday, the government said it had paid out $221 million of the $1 billion set aside for the program. The 22,000 participating dealers may have had trouble at the start of the week, but problems were being resolved, said Rae Tyson, spokesman for the National Highway Transportation Safety Administration only hours before the suspension was announced. The system was processing 12,000 transactions simultaneously Thursday.

But some dealers say demand has been so brisk, they fear the program could go broke in days or weeks, long before its Nov. 1 expiration.

One Honda and General Motors dealer in Fort Worth says he has 50 clunker deals that are being held up by paperwork. “We’re going back to our second and third round with customers to have things signed,” says Will Churchill, owner of Frank Kent Motor. “They keep coming up with new forms to sign,” Churchill says.

While good intended (aren’t all liberal programs), it’s clear the program is a “Lemon.”

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