The Cash for Clunkers program ended Monday and on Tuesday I was reading reports that the government had only paid out 2% of the claims.
Yeah, you can imagine how big a hurry they’re in to write out those checks. Turn the thing around and imagine that you owed the IRS a few thousand. How patient do you reckon they’d be? Having dealt with the IRS over shortages in the amount of money they wrest from my pocket, I can tell you personally that they are not among the most patient of organizations.
But the tables are turned. The government either does not know, or does not care (or both) about the relationship between real businesses and cash flow. One of the local dealers reported selling eighty cars. If we take an average rebate of $4000, then that dealer is out $320,000 until the Obamanation comes across with the dough. If that was supposed to be operating capital, then the dealer is going to have to go to the bank for a little “until I get my check” loan.
‘Nuther thing: The clunker program put a big boost in a lot oaf dealers’ sales. How many of you want to bet on a few things?
First, a lot of folks who might have been contemplating a car purchase this year very likely moved that purchase up to get the C4C money, so the next couple of months are going to be dry for sales.
Second, how many folks do you reckon did this just like the “everybody deserves a house” bunch with home mortgages and ran out with the old clunker and bought a new car they can’t afford to pay monthly notes and insurance on? I look for the repo guys to be getting their own business boost out of the C4C program.
Third, did anyone notice that out of the top TEN models bought under the program, NONE were from Bailout Motors (Chrysler and GM). Ford, who didn’t take the Federal money, had two cars on the list. The rest? all those silly foreign cars…
But then I’m just cynical, ain’t I?