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AutoBlog: GM to reimburse dealers until Cash for Clunkers rebates arrive

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Filed under: Car Buying, Government/Legal, GM

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If there's one thing that General Motors knows right now, it's that Cash for Clunkers is good for business. The automaker announced earlier this week that it was adding shifts at several assembly plants to increase production of popular vehicles in response to the program's success. So it would be a bad thing if, as the National Automobile Dealers Association has requested, the government suspended the program until it could sort out how many vehicles have been sold, how many rebates are owed dealers and, most importantly, how much of the government's $3 billion in funding is left.

But we've got trouble brewing thanks to the government's inability to process reimbursement requests from dealers fast enough. The backlog of requests continues to grow, and no one knows where in the pile the funding will run out. So, some dealers are voluntarily pulling out of the program now before they get stuck paying for rebates that won't be reimbursed.

This is the last thing GM wants its dealers to do, so it's stepping up to bridge the gap between the time a dealer submits a request for reimbursement and the government gets around to paying it. GM will begin providing cash advances equal to the amount of C4C rebates ($3,500-$4,500 per vehicle) to its dealers for every vehicle already sold under the program and any new transactions going forward. According to GM, that should give each dealer enough liquidity to keep operating while waiting for the government to cut a check.

Of course, since GM accepted billions of dollars in federal loans to avoid bankruptcy and then, after entering Chapter 11 bankruptcy anyway, emerged as partly owned by the U.S. government, the money's really all coming from the place. It just seems that GM has a better accounting department than the U.S. Treasury.

[source: General Motors | Photo by Ethan Miller/Getty]

Continue reading GM to reimburse dealers until Cash for Clunkers rebates arrive

GM to reimburse dealers until Cash for Clunkers rebates arrive originally appeared on Autoblog on Thu, 20 Aug 2009 10:29:00 EST. Please see our terms for use of feeds.

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This is a good move.

Instead of the government paying GM back for each C4C rebate handed out, the government should take that money off the amount that GM is expected to pay back. So for anyone who doesn't like the fact that GM is owned by the government, the best way to end governent ownership is to buy a GM vehicle.

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I agree. Helps GM, helps the federal deficit. Then GM can IPO when it needs more cash.

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Talk about a PR coup!

Jump on this GM!

And Chrysler?

Are you listening?

Someone should have thought of this before C4C began.

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