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Cash For Clunkers: EPIC FAIL

Remember how cash for clunkers was so successful that Congress was forced to triple the size of the program in a hurry? Well, those billions of dollars will go further now that hundreds of New York auto dealers have decided the program is too badly managed to keep participating in:

Hundreds of auto dealers in the New York area have withdrawn from the government’s Cash for Clunkers program, citing delays in getting reimbursed by the government, a dealership group said Wednesday.

The Greater New York Automobile Dealers Association, which represents dealerships in the New York metro area, said about half its 425 members have left the program because they cannot afford to offer more rebates. They’re also worried about getting repaid.

“(The government) needs to move the system forward and they need to start paying these dealers,” said Mark Schienberg, the group’s president. “This is a cash-dependent business…”

Schienberg said the group’s dealers have been repaid for only about 2 percent of the clunkers deals they’ve made so far.

Many dealers have said they are worried they won’t get repaid at all, while others have waited so long to get reimbursed they don’t have the cash to fund any more rebates, Schienberg said.

The problem is not that the federal program is poorly-intentioned, or even that it has an inherent design flaw – at least from the point of view of the car dealers. On the contrary – giving people money to buy cars is exceedingly simple. Unfortunately, the federal government is just too slow and inefficient to respond to the demands of a complex market with hundreds of thousands of actors. Dealers either have to stay out of the program, or accept slow responses, uncertainty about rules, and bureaucratic complexity. That’s simply part of dealing with the government.

At least they can console themselves in the knowledge that at the end of the day, buying or selling a car is not a life or death issue – like say, health care.

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