What some consider as a wasteful government spending program is getting even more criticism, this time from New York auto dealers who are considering pulling out of Cash for Clunkers.
According to the Greater New York Automobile Dealers Association (GNYADA), an organization which represents 450 local franchised new car dealerships, many of its members may terminate their participation in the program because the government is not approving transactions and reimbursing dealers in a timely manner.
GNYADA president Mark Schienberg says some dealers have offered hundreds of thousands of dollars in rebates, but only a small percentage has been reimbursed leaving them cash-strapped.
"Even in the best of times, carrying this much debt would cause problems, but in today’s credit-strained economy, it’s simply too much for the dealers to handle," Schienberg complained.
Cash for Clunkers, which offers rebates of up to $4,500 to encourage drivers to trade in older, gas-guzzling vehicles for more fuel-efficient ones, was introduced by Congress last month.
However, it has come under fire from fiscal conservatives for what they see as another example of wasteful spending which only worsens the budget deficit while providing only a temporary solution to the car industry problems of declining sales.