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All CARS payouts pledged by Sept. 30

November 15, 2010

Thanks to an army of 5,000 examiners (up from 225 at the beginning of the program), officials of the CARS program said they expect to pay all valid claims by Sept. 30. About 87 percent of the transactions, for $2.5 billion, reportedly had been paid by Sept. 15.

"All dealers will be paid by or before the end of September, probably before," Transportation Secretary Ray LaHood said at a Sept. 15 news conference. "We’re down to the last applications that are deficient."

The $2.5 billion figure represented a doubling of payments in just six days. Dealers claimed about $2.88 billion from the program, which was funded for $3 billion in "cash-for-clunkers" transactions.

Some dealers with numerous CARS deals have had to lend personal money to their businesses, to cover cash flow problems created by payout delays.

"Cash flow is the lifeblood of small businesses, and dealers need those funds to pay our own employees," said Russ Darrow, chairman of the American International Automobile Dealers Association.

 

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