Cash for Clunkers almost all paid up

WASHINGTON — The Transportation Department has approved nearly all the claims for repayment filed by dealers under the Cash for Clunkers auto rebate program, the federal agency said Friday.

About 98 percent of the claims that dealers filed have been paid or approved for payment, according to the most recent statistics released by federal officials. That amounted to $2.78 billion worth of claims.

Nearly 700,000 vehicles were sold through the program that ran in late July and for most of August. Car buyers were offered rebates up to $4,500 off the price of a new car if they traded in less fuel-efficient vehicles. The program, originally budgeted for $1 billion, proved far more popular than the government expected, prompting lawmakers to boost it to $3 billion.

But dealers complained the government was slow to repay them for the deals they gave car buyers in showrooms. Dealers said the computer system set up to handle claims was too slow and that their applications were often rejected for minor details, delaying repayments and creating a cash crunch for many.

The Transportation Department later improved the computer network and increased the number of staff reviewing claims. All dealers are expected to be repaid by the end of September.

The agency also said dealers who couldn't file deals by the Aug. 25 deadline or had their claims rejected still could seek repayment if they could show the problems were caused by government error. That includes dealers who were locked out of the computer system after mistakenly entering incorrect passwords.

About 13,000 claims still haven't been approved.

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