Commerce Republicans Press DOT on “Cash for Clunkers” Payments to Car Dealers

Call for More Transparency in Program Implementation

August 24, 2009

WASHINGTON, D.C. – Republican members of the Senate Commerce, Science, and Transportation Committee, led by Ranking Member Kay Bailey Hutchison (R-Texas), today voiced strong concerns to Transportation Secretary Ray LaHood on delays in payment to car dealers as part of the Car Allowance Rebate System (CARS) program.  Joining Senator Hutchison were Senators Olympia Snowe (R-Maine), John Thune (R-S.D.), Johnny Isakson (R-Ga.), Roger Wicker (R-Miss.), Sam Brownback (R-Kansas), Mike Johanns (R-Neb.), and Mel Martinez (R-Fla.).

The Senators noted that the National Highway Transportation Safety Administration (NHTSA) has only paid out about $140 million of the $3 billion authorized to reimburse dealers despite the fact that more than 635,000 vehicles have been sold to customers under the CARS program.

“Operating without the promised timely reimbursements places an extraordinary burden on dealers, especially smaller dealers, and in some cases, has forced dealers to opt-out of the program before its official termination,” stated the Senators in their letter. “Many have waited weeks just to find out their applications have been denied and require resubmission, further delaying the reimbursement.  We must ensure that our local dealers receive timely reimbursements under the CARS program.  The law requires reimbursements be made within 10 days of eligible submission.  Nevertheless, auto dealers find they are still waiting for their refunds weeks after eligible submission.”

The Senators letter requests increased program transparency from the Department of Transportation and Secretary LaHood in the form of regular state by state updates on the CARS program, including:





           The total dollar amounts reimbursed to dealers;



           The average time it takes to reimburse dealers from submission of application through transfer of the reimbursement; and



           The number of denied applications, including those that are eventually accepted after resubmission.




The Senators also urged the Secretary to review the dealer submission process and streamline any burdensome regulatory steps that are contributing to the delayed reimbursements.

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A copy of the letter to Secretary LaHood is attached.