How to Avoid the ‘Cash for Clunkers’ Snarl

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To Jason AZ:
Stop trying to be a heroic Dealer Basher.
Once again, as others, your information is not factual.
There is NO Specific Rule in the 136 page law nor the 20 Page amendment that forbids a contingency agreement. READ THE ENTIRE RULE on the cars.gov website.
We contacted legal counsel for assurance, and, in the Q and A on their site it states that contingency agreements can be made between the Consumer and the Dealer.
If one party disagrees, then, there is no sale and the customer can go somewhere else.
It is the CONSUMERS responsibility to supply the documentation to insure they qualify, then, the dealers responsibility as to accuracy upon submission.
When you submit proper documentation and still get rejects, there's a problem with the system, NOT the dealer.
As to your inventory statement, dealers intentionally reduced their inventories a year ago when the economy started tanking and interest rates soared, if there is a shortage of inventory now, its not due to this so called huge spur in sales, it's pent up demand catching up with existing small inventories.
If you truly are a business man, then you try waiting for thousands and millions of dollars to operate your business, when your product has been delivered, and no guarantee you'll get paid. I think NOT!
So you try and "SIMMA DOWN" when you've got thousands/millions of dollars outstanding and no way to get it back.
Your statement that the dealer could just take the car back is a real joke. The dealer has no legal recourse to take the car back without the contingency agreement, then if he's already destroyed the customers trade, as was initially required by the rule, what happens to the consumer?
Your statement "the way car dealers treat their customers" is a broad statement branding the entire industry when in fact shoddy practices are done by only a few, the majority of all New Car Franchise Dealers make every effort at customer satisfaction as their Manufacturers tie their incentives to it. Customers need to fill out their surveys rather than pitching them, as they DO have impact.
For every horror story you hear of a dealer mistreating a customer, I can tell you one of a customer attempting to defraud a dealer. So lets get real here!
The facts are still the same, this program is a mismanaged joke, played against the taxpayer, for the sole purpose to make it appear the government is doing something about the economy.
The actual rule, under the Costs and Benefits section, specifically states, there will be NO ECONOMIC BENEFIT to this program, to the economy or the manufacturer.
So, if you would read, rather than assume, you could stop broadcasting false information.
Get off of your soap box, stop beating your chest as to how knowledgeable you are, and go promote your horror story website somewhere else!

philr of FL 10:43AM August 21, 2009

Let's see, dealers have been sitting on tons of inventory, then the fed goes ahead and gives the industry a shot in the arm. Great!
But what happens? Dealers resort to stupid sales tactics like they always do. There is a specific rule in the CARS program that forbids the dealer from requiring any kind of contingency contract for the amount of the CARS rebate in case the claim is denied. It is the dealer's obligation to ensure the vehicle and the owner qualify for the rebate. Worse case: the dealer has to take the new car back and eat the difference.
Look, I'm a businessman too, and if I treated my customers the way car dealers treated their customers, I'd be out of business. So, please, eat your cheese and quit whining. Customers are back in the dealerships, and at least some cash is flowing for you. In another month, expect the customers to disappear, because the incentive to get tortured and lied to will be gone.
If anyone here has a story to tell about their cash for clunker experience, tell it to the world at www.cardealerhorrorstories.com/reader-story.

Jason of AZ 4:08AM August 21, 2009

Rick Newman needs to get his facts correct. Obviously he did little research into this article before he wrote it and just spewed propaganda as fact, as much of the media is doing.
First, there is no law preventing a dealer from requiring a contigency agreement in case they do not receive the funds from the government. That is an agreement between the consumer and the Dealer. No Federal law can prevent any business from protecting itself in contract fashion. Second, most dealers are now on the hook for much more than he wrote in his article. The math is simple based on sales.
Having had first hand experience in processing 138 of these transactions, I can state as fact this is one of the poorest executions of any program I have ever seen. (Govt Healthcare? HA!HA!)
Applications are being rejected for undisclosed errors, its called error &&X with no reason given for the error.
Applications are being rejected for lack of insurance for 1 year, when the actual proof is given and DOES provide proof of continuous coverage. Therefore the customers application goes back to the bottom of the pile for another 20 days, and yes I said 20 days. The dealers were assured they would have payment in 10 when they entered this program. We along with many other dealers have not even had a response on 93% of our claims which were submitted on July 30th after 2 days of trying to just log in to the government website. I have documentation to prove everything I am saying as do most of the dealers out there, yet Lahood and the government continue to rant about how successful this program is.
The governmet refuses to state how much has actually been paid out under this program. Everything they state is conjecture.
When a dealer applys for the rebate, he enters the data into an Oracle database. That's an application that holds all of the information for the transaction. It would be very simple for the government to run a query on the database as to how many applications they have received, how much they have paid out, and how much is rejected. Do a little math and you have the total. To date, they have refused to do this. They took the running counter off their website the second day it was up, so no one had any idea how much money was left, nor what had been paid. The dealer is expected to deliver vehicles in the dark, not knowing if they will get paid and being told that when the money runs out, they are out the dollars if they have delivered the car. What recourse does a dealer have other than returning to the customer for the car or the money. That's where the contigency agreement comes into play. Sure traffic in the dealerships rose, partly because of the pent up demand and mainly because of the offer for basically free money to the consumer. If any retailer advertised FREE money, their traffic would increase dramatically.
You want to know the facts, go sit in a dealers accounting office and watch the replys and paperwork.
C4C is a joke & failure

Phil R of FL 11:15PM August 20, 2009

The administration of the CARS program is a disgrace, and a possible major detraction from getting much needed health care reform passed.
Over two weeks ago we bought a new car trading in a very old truck that truly qualified as a clunker. This clunker is still sitting on the dealer's lot ,,,, so no paperwork has cleared.
I read yesterday that NHTSA is rejecting applications for reimbursement that have no middle names listed. My husband has no middle name ( legally), so we are holding our breath waiting for the call saying we have been rejected.
How could such a wonderful program have turned so sour? In principle, it should have given dealers much needed cash flow. But now, it is generating negative cash returns, which may drive more dealers out of business.
Unfortunately, this will be a real blemish on Obama's record.

mindy of PA 10:44AM August 20, 2009

I've been waiting . . . sales person said I was lacking documents: Certification from our DMV that my Benz was "registered" the previous year (2008)and I also needed proof of insurance for 2008 as well. Note: My registration expires 31AUG09. I renewed my registration 05AUG (I hate the long lines "end of month") an applied for the "cash-for-clunkers" 08AUG. Just like everyone else the dealer is waiting for the money!

Jerry 1:47AM August 20, 2009

Problems processing payments for cash for clunkers, high reject rates, I guess that is par for the course with the government. But what is acceptable for handling rebates on cars is not acceptable for handling healthcare -- yet that is exactly what the Administration and Congress want us to do.
The inability of the Obama administration to handle even this simple program easily, runs out of funds, approves new funds, changes the MPG rules, now not processing the payments.
Anyone who wants the government in healthcare only has to look at how this simple program has become botched beyond belief.
Media should stop trying to make people opposed to big government in healthcare look like idiots and recognize that we know that big government does not work -- just look here-- if they cannot handle payments on a clunker car, then how can we expect them to handle our health.
Sorry but I am not convinced that a public option is the right thing -- because if the government cannot deliver in the small things that are not life threatening how do you expect them to deal with the big things.

Mark of IL 9:22PM August 19, 2009

When, and who, determined that car dealerships are "cash cows" with money to burn (other than Toyota and Lexus dealers of course since they build a premium product, well in fact, had mare recalls than cars sold last year). Your dealers are dying slow painful deaths... and when all you idiots have to drive 30 miles to get your car worked on, and then get put in back of line beacuse you didnt buy car there, and also then give all that tax revenue to a different town or county, watch unemployment raise by at least 440,000 nationwide....I want to hear your comments then. Why should dealers get put on hook for clunkers money? Do the math people, if a dealer does 125 clunker deals at 4000 average, thats $500,000. 1 out of 500 dealerships have $250,000 liquid cash. And Rick, in case you haven't been watching news lately, there is no money to be lent to businesses, so where will it come from? Ill tell you where, bankruptcy court. When any one of you dealership bashers walks into your local grocery store and demands to pay 99 cents for a gallon of milk that is marked $2.39, ill renew my respect for you, beacuar thats what you idiots do to us every day!!!

John of IL 6:55PM August 19, 2009

Dealerships are not following the rules of the program
Worst experiace ive ever had
salesperson is of no help
I WANT MY CAR!!!!!!!!

gm of MA 4:55PM August 19, 2009

Purchased a vehicle 28 July first day of the program. Still awaiting approval. My dealership has not received even one approval back, but mine came back declined due to errors, there were no errors and it was sent back. Does that put me back in line at the front or the back behind the additional 350,000 new submissions.
I am tempted based on this article to sign the agreement to pay the $4500.00 if govt fails to just because the dealership isn to allowed to make that part of the contract.

Brett Ray Oxley of OH 4:03PM August 19, 2009

Got all the documents to the dealer early August. My salesperson's admin skills are FAR from the best. He told us 3 times he needed the 1 year proof of registration (and we gave him 2 copies of our registration which showed our Explorer had been registered since 10/07 - it's a 2 year registration). He lost 2 of my 3 insurance cards that contained our 1 year proof of insurance. So my insurance company ended up writing a letter. Finally get all of that settled, new car is insured and spent close to an hour signing paperwork and they told us we need to wait 5 - 10 days for gov't approval. It's close to 2 weeks and we're still waiting - along with over 30 more people. I told them what they are doing is illegal and they are insisting it isn't. Other Ford dealerships told me my dealership is doing wrong, but unfortunately they don't have any more Fusions in stock. Decided to test drive an Altima last night - didn't like as much as the Fusion and I would be getting more for the money with the Ford, but I cannot continue with Nissan until I get proof that my deal with Ford is cancelled with the gov't. That might take 1 - 2 weeks right there. I called the hotline yesterday and didn't get very far. The person I spoke with pretty much just took down my info and e-mail address. Never asked for information on the dealership I am dealing with. Most other people I know said it was a piece of cake. This is very frustrating. I will try the hotline again tonight. I don't think this is very fair for us or the other 30 or so people to wait around. But they aren't releasing cars.

Dee of NY 3:32PM August 19, 2009