Dealers and consumers from around the country are using a new four letter word:  CARS. 

Imagine this round on Jeopardy:

“Alex,  I’ll take Government Programs for $400.“   Joe Consumer asks confidently

Alex Answers “The most disorganized government program ever thrown on cars dealers or consumers“

Joe hits the buzzer “What is the Car Allowance Rebate System – aka CARS“.

Read the consumer commentary on our SPEAK-UP forum or comments on our news updates to get an idea of what is happening around the country with the CARS program.  One of the most common critiques is a statement to this effect:

“And this is the same government that wants to create laws to run national healthcare?”

Dealers On The Brink of Mutiny

Dealers are overwhelmed, overrun and starting to bail. Yesterday alone we had emails and calls from a dozen dealers that have stopped taking in CARS sales.  Their reasons vary but many feel that since the system is so screwed up, they are not confident in getting paid. 

Dealers complain that the NHTSA website, needed to enter CARS sales transactions, is difficult at best to use. The system keeps booting them off midway through the data entry process.  A reboot that requires them to start all over.

For most car dealerships, they have witnessed staffing cutbacks, steep losses and a reluctant consumer buyer.  Now throw on their plate a program that does not yield them any more profit per sale but adds hundreds of dollars of admin costs per sale and financial liability and cash-flow demands. 

A program that requires their staff to work through the night to enter in CARS sales transactions since during the day the NHTSA system cannot handle the dealer load.  A system that has more paperwork, more liability and more coordination than anything they have ever experienced.

The current state of affairs with the CARS program: it is aggravating more consumers than it is pleasing.  These are the same consumers the dealers were hoping to win back into their good favor.

We have included a post from one dealer on our forum commenting on our post that the NHTSA “money gauge” is worthless because of backlog of submitted sales.  Our dealer survey yesterday showed that over 60% of CARS sales were still offline. 

We believe that the CARS program will run out of money very shortly and will never have enough to last till September, let alone November 1st.

A Dealer Speaks Out

Anyone who thinks that the “panic” is being created by car dealers just trying to have a good July…think again. I am just one dealer, but I talk regularly with dealers who own about 30 dealerships collectively. Trust me. We are SWAMPED! Overrun. Overwhelmed. My Toyota store has 75 deals as of Wednesday. We have 55 submitted to the NHTSA site. We have zero approved.

The reason we have more than 35% submitted is because we have people entering deals until 2:30 am every day.

The 30 dealerships I know have more than 1200 cars sold and are more in the 40% range submitted. If the rest of the country is anywhere close to us it sure seems like a billion will go lightning fast.

I am not saying that there may be a possibility that this will all slow down soon , but PLEASE don’t blame dealers for hyping this. I wouldn’t pay five cents to promote or advertise for customers. I am terrified that I will not get paid the roughly $300,000 I need to collect from Uncle Sam right now.

Come on out to my dealership and watch people who are working 18 hrs a day to process your deals and tell me you think WE are hyping anything. If the money runs out early it is the dealer who will be screwed.

Trust me, they either will add money to this or it will be over soon. Not saying that to get you in the store either. I don’t need any more deals. I need to get paid on the deals I have already done.

Consumers Are Not Happy Either

Since dealers are scared about getting paid or their sales applications being rejected, they are asking consumers to sign waivers that if their CARS transaction is rejected, they are on the hook for the rebate money.  Consumers are wary about signing any documents that make them bear the burden of responsibility.

Consumers are also unhappy about the changes to EPA mpg ratings that knocked some of their deals off the table.  We were one of the first to report that numbers on fueleconomy.gov were changing. 

We also have documented complaints from consumers who have cars that are not listed on the CARS website.  We were pleased yesterday to report the story of Don Asay who fought to get his 1997 Jeep Wrangler on the CARS approved list.

There are hundreds of issues that have been brought up in our forums.  The tone is far from congratulatory.

Who is To Blame?

Don’t blame the NHTSA or the EPA. 

Congress handed the NHTSA a bill that required their staff  to implement a new national rebate program in 30 days.  If anyone knows what goes into planning a national IT infrastructure project that can handle ten of thousands of simultaneous Internet connections; the 30 day requirements was doomed for failure.

It was unrealistic to expect NHTSA lawyers to review a bill and come up with a comprehensive set of rules and guidelines in 30 days.  They did a good job but there are so many unanswered questions, the Final Rule is just a final draft.

Our legislators drafted language that created this rush and stress on the automotive retail industry.  It would seem that automotive retailers were really not part of the planning when the language of the bill was drafted.

So if Americans are feeling that there is a rush to get a healthcare bill passed…is the CARS program a clear warning that rushing into another unrealistic expectation could spell disaster?