by Nei Roland

WASHINGTON — The Obama administration plans to announce in the next few days a strategy for winding down the $3 billion cash-for-clunkers program so dealers aren’t on the hook for credit given to customers, Transportation Secretary Ray LaHood said.

The department will rely on surveys of dealer sales and other surveys to estimate the amount of money dealers are expecting to be paid.

“We can make a pretty good judgment call,” LaHood said at a news conference on an unrelated matter. “I know dealers are frustrated, but they’re going to get paid.”

He blamed delays on dealers’ failure to fill out claims correctly and on the unexpected volume of vehicles purchased under the program.

The cash-for-clunkers initiative offers consumers vouchers of up to $4,500 for turning in gas-guzzling vehicles for new ones with better fuel efficiency. Under the program, dealers must apply electronically for reimbursement.

As of Tuesday, dealers had submitted claims for 411,624 clunker transactions involving rebates of $1.72 billion. It’s not clear how many more clunkers sales have been completed by dealers but are not yet on file in the government’s system.

Many dealers who have submitted claims have complained about high rejection rates and weeks-long payment delays.

Source: Automotive News