Clunker Rejection Rate Said to be Declining

Washington DC August 19, 2009; The AIADA newsletter reported that dealers' Cash for Clunker claims are being rejected at a dramatically lower rate because data entry errors have declined, setting the stage for a speed-up of federal rebates, a Transportation Department spokesman said on Tuesday.

According to Automotive News, in the past 10 days, the rejection rate has fallen substantially to an unspecified level after efforts by officials to train dealers on proper data entry.

The improvement will help ease the backlog of claims filed multiple times after government rejection of dealer rebate applications, he said. This backlog has slowed reimbursements to dealers for payment of $3,500 or $4,500 credits to customers.

MSNBC reports that many dealers are growing frustrated with the slow reimbursement rate. In Maryland alone, dealers have put in $36 million in claims under the clunkers program but have been reimbursed for only about 2 percent of the total.

AIADA member Fitzgerald Automotive, one of the largest Washington area dealerships, says it is owed $2.7 million from the government. Darcars, another Washington dealership, says it is owed $5 million after taking in roughly 1,300 vehicles.