AutoNation Inc., the largest U.S. auto retailer, is among several retailers who have stopped selling cars and trucks under the Obama administration’s “cash for clunkers” program at least two days before the deadline.

Group 1 Automotive Inc., citing paperwork backlogs and slow reimbursements from the Transportation Department, also stopped such sales. Some independent dealers have also quit taking older vehicles for federal subsidies of up to $4,500 on new, more fuel-efficient ones under the $3 billion U.S. program, formally known as the Car Allowance Rebate System.
The plan has recorded more than 489,000 dealer transactions valued at $2.04 billion in rebates, according to Transportation Department data released. The department said it wouldn’t extend a deadline of 08:00 P.M. Aug. 24 for submitting applications for the rebates. It’s up to dealers to decide when to stop taking trade-ins in order to make filings on time.
“If we make a deal and aren’t able to submit the paperwork in time it could pose a significant financial risk to the company,” Peter DeLongchamps, a Group 1 vice president, said Friday in a telephone interview.
The cutoff ensures that “we have enough time to get our deals in by tonight,” the deadline set by the government for applications, AutoNation President Mike Maroone said in a Bloomberg television interview from the company’s headquarters in Fort Lauderdale, Florida.
The government owes AutoNation about $45 million for sales by its dealers under the program, Maroone said. The company has “no doubt” that it will receive the payments, he said. “It has been an unbelievable program.”
AutoNation rose 1 cent, or 0.1 percent, to $19.11 Friday in New York Stock Exchange composite trading and is 93 percent higher so far this year.
Group 1’s eastern region, which includes New York and Florida, had been able to submit 800 completed applications from its 1,200 eligible sales because of “cumbersome” processing, DeLongchamps said. That unit, comprising 41 percent of the Houston-based company’s operations, had already stopped taking in clunkers.
Slowdowns and crashes with the program’s computer system may keep some dealers from being able to submit applications by the deadline, National Automobile Dealers Association said in a statement. The group recommended that the deadline be extended so every valid deal can be accepted. The Transportation Department will not change the deadline, Jill Zuckman, a spokeswoman, said in an e-mail.
The government’s payouts are behind, too, dealers said. Of the roughly 4,000 deals Group 1 had completed companywide as of Aug. 20, it received reimbursement for 37, DeLongchamps said.
Group 1 rose 16 cents, or 0.5 percent, to $30.29 Friday in New York Stock Exchange composite trading. It has more than doubled this year.
Some independent auto dealers in the San Francisco Bay area said they had already stopped offering clunker deals.
Slow payments from the government, burdensome paperwork and a lack of cars on the lot led Stewart Chevrolet Cadillac in Colma, California to opt out early, Frank Fragomeni, general manager, 53, said.
“We’re finished with the clunkers program,” Fragomeni, 53, said. The dealership had been repaid for only one vehicle out of about 50 sold under the program. “ You’ve got to have a lot of capital to withstand that kind of exposure,” he said.
Consumers get $4,500 vouchers if the new car they are buying gets 10 miles-a-gallon better gas mileage than the model they are trading in. For light trucks, the improvement must be 5 mpg better than the older model, and for large light trucks, 2 mpg.
For a $3,500 voucher, the improvement for cars must be 4 mpg or better, for light trucks, 2 mpg, and for large light trucks, 1 mpg. The trade-in vehicle must be no older than a 1984 model and get 18 mpg or less in combined city/highway fuel economy.
New passenger cars purchased with the vouchers must get at least 22 mpg in city/highway fuel economy, light trucks must get at least 18 mpg, and large light trucks 15 mpg.
Toyota Motor Corp.’s Corolla has been the most-purchased vehicle under the program. Three of the top six are Toyota sedans; three of the top 10 are Honda Motor Co. models.
Joe Shaghasi, general manager for San Francisco Ford Lincoln Mercury, said he had spoken with other dealers who were opting out of the program.
“We haven’t stopped” he said yesterday in San Francisco. “This has brought a lot of people through our doors,” said Shaghasi, 40. “It has been phenomenal.” Bobby Lynn, general manager of Burien Chevrolet in Burien, Washington, south of Seattle, had to turn away one person looking for a Chevy Traverse, a crossover SUV, indicating that some potential sales may be thwarted by lack of inventory. He’s also out of the Cobalt sedan.
(Source: Bloomberg)
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The AutoNation Inc., the largest U.S. auto retailer