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Cash for Clunkers Restarts
White House officials are saying that the Cash For Clunkers program will continue despite possibly using up all of the initial $1 billion dollars in funding. The White House is exploring ways in which to obtain this additional funding, and we will keep you posted as soon as we know more. The White House is saying, the program should be running as normal.
Translation: Get out and buy a new car quickly before they change their mind.
Consumers are encouraged to continue participating in the Cash For Clunkers Program, officially known as C.A.R.S. (Car Allowance Rebate System). Dealers have been assured that they will be reimbursed for all qualifiying clunker trade-ins.
This morning the NHTSA has taken off the “Money Gauge” from their website.
The official news later today can take many forms but it is clear that the NHTSA has to get an accurate count of how many sales have been done to date if the $1 billion in funding is not significantly increased.
The root of the problem that caused this panic was the disconnect between the flow of sales and the input of sales data into the NHTSA system. For most dealers, one or two people inside the dealership were assigned to input sales which is a small ratio to the number of sales staff taking deals.
The backlog of deals done before July 27th combined with the rush of consumers to buy cars overwhelmed both the NHTSA systems and car dealer data entry staff.
Problems Surfaced on Day One
When dealers started entering sales on Monday they found out that the NHTSA web based sales entry system was cumbersome, cryptic and unable to handle thousands of simultaneous transactions. Dealers started to report to CashForClunkersFacts.com their woes on Monday.
For many dealers, day one and day two resulted in zero sales being input. On Tuesday we predicted from our survey data that the program could be out of money by August 1st. Some laughed and said that we were hyping the program to start a “run on the bank”. We just were good at math, not hype.
Entering Sales Is Like A Root Canal Without Novocaine
When dealers could enter in a CARS sales transaction, the entire process with document scanning, compliance checks and data entry took about 90 minutes. This doesn’t count for the time dealers had to add to the process by calling back buyers to sign additional paperwork that was released as part of the Final Rule on Friday July 24th.
Some dealers in out survey data on Tuesday had 20, 30, 40 and up to 70 sales completed and none in the NHTSA system.
When you step back and do the math, the NHTSA was wise to consider suspending the program until the backlog of sales could be entered. Unfortunately for car dealers and consumers, any suspension in the program will be costly. It could take 2-3 weeks for all sales get entered into the NHTSA system based on the sporadic reliability of the technical infrastructure that is in place.
Dealers have spent thousands of dollars to prepare for the program and shutting it down in five days would be disastrous to businesses that already have struggling cash-flow and negative bottom line trends.
The Infamous 5 Day Government Program?
The Associated Press yesterday in a press release spun the CARS program as “wildly popular“. This program has been a wild ride but if you read the feedback from dealers and consumers, the program rules and the process for those that qualified is far from popular.
One dealer commented that the CARS program is the most burdensome program ever handed to car dealers at a time when their cash-flow and staffing are at an all time low.
We believe that the program, popular or unpopular as it may be, will get additional funding next week. We don’t think it will be an easy sell next week but we hope that both sides recognize the damage that will be done if additional monies are not approved.
We are also hearing that the NHTSA is adding staff to handle the review of dealer sales paperwork. Dealers are advised to review all documents before they are submitted. Reports have said that many dealers are having their submissions rejected for simple errors.
Cash for Clunkers Petition
Consumers who have been excluded based on the current wording of the CARS program rules are hoping that additional funding would come with relaxed rules. Thousands have already added their name to the online petition at: www.nocashforclunkers.com
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49 responses on “Cash for Clunkers Restarts”
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Dan, we’re in the same spot as you almost. The dealer is asking us for the payment so they can put in against this month’s numbers, but they’re telling us that it would benefit us to pay them so we won’t lose the chrysler incentive. Just not sure which is riskier, paying them and waiting for delivery, or holding off until C4C is approved and then possibly losing the extra chrysler incentive.
SPY – I agree – does not seem right… but then again… I already paid for my new vehicle and I have not taken delivery because the dealer has not gotten confirmation from the govt yet.
What I don’t get is that the GOV gave Banks cash without any one watching. Now I have all the paperwork in and the GOV decides it’s going to ckeck every piece. Just think if I was AIG I would have the 4500 for the car and then some. Waiting since Monday for the Gov to step for the 4500. I’m starting to get over the new car bug.
Need advice, We agreed to purchase a new 09 jeep patriot with trading in my clunker for the full 4500. We signed all paperwork on Tuesday and they entered our clunker into the system then. The dealer is holding our new jeep until the voucher is approved by the gov’t, but they want us to come in there tonight (30 mile drive) to give them the bank check for the car and to finalize the paper work. Doesn’t seem right to me….
The house just passed bill to add $2 billion more to the program. Senate suppose to vote on Monday. Program has been extended through the weekend.
I think you guy’s need to do a better job of researching “Your” information before posting your own comments. If we as dealers keep listening to you, we might as well cancel the whole program now.
My dealer is telling me they will not release car until car has been scrapped leaving me without a car for an undetermined amount of time- can they do this? whathappens if somehow delaer does not get$$ from government and I am without a car
Why are car dealerships stopping the sales of new cars then? I was in a dealer today ready to buy a new car and they said they are not excepting any cash for clunkers programs…. I was all aproved and ready to go….. Can you tell me what is really going on????
Terry
Javier, you rock! Not only is the $1 billion going right back into the economy, but each buyer is ponying up at $10,000 and as much as $37,500 for each new car bought! Say an average of $20,000 for 250,000 new cars, and that is $5 billion in circulation, exactly what every economist agrees will fight the recession. Those $600 “Bush-buyouts” from before went right into the bank, and we went right into recession. If they add another $2 billion to CFC, that equates to antoher $10 billion to the economy. Awesome.
Animal – what about the manufacturer incentive?
As a dealer – maybe you can answer this for me. I should have been provided with a “scrap value” and I should have gotten that back to me (less $50) – correct?
Since this is an anonymous forum… what is happenning really with these clunkers? Are dealers selling them to scrap yards in excess of the “scrap value” that the dealer gives back to the consumer? I have to assume the scrap value to a junk yard on a 2001 truck is greater than a 1988 truck.
i put a deposit down 2 weeks ago and the dealer could not log on to the joke of a federal website to submit the paper work to get the payment confirmation. now what to do. i signed the deal on my new car last night at 8pm i should be all set but im not? what a waste
I am a MA dealer. I can tell you that you WILL have to pay the additional sales tax. This is not the fault of your dealer, but the CARS program.
Thanks Jonnyknows –
I assumed that was the deal. Also – I already paid for the car (final price less clunker rebate) but have not taken delivery – bummer!
…>D
Dan:
If you signed all contracts for the purchase (this includes bank contracts, purchase orders, MV registration etc. etc.) , BUT didnt take delivery of the vehicle you are locked into that contract dates sales tax AND manufacturer incentives.
If you just signed a agreement with the dealer to “buy” the vehicle in the future you are subject to tax and rebates based on the date you sign all the additional paperwork.
-He who knows
Here is a Q – actually 2 –
I signed a contract to purchase a vehicle this past Tuesday. I have not taken delivery because the deal has not gotten CARS confirmation.
Tomorrow – MA sales tax goes from 5% to 6.25%. If I take delivery after the sales tax goes up – do I have to pay the expanded sales tax?
Also – what is the car manufacturer changes their incentive and increases/decreases the incentive for the vehicle in August for the vehicle that I purchased in July? The vehicle has a $1,000 rebate in July – what happens if that goes up/down in August?
Thanks – D
JOE…Thanks for your info. I’ll give it a try. If it’s meant to be then great. If not, I’ll just hang on to it 3 more years. Oh, wait a minute…I will probably have two weddings then. LOL.
Thanks Again!
Talk about smugness.
Jeez, cashforclunkersfacts, get over yourself that you were right about the timeline
Cheri,
I would call the number on CARS. They could tell you what the appeal process is.They have been very helpful. I also turned in a dealership to the Inspector General’s Office and went to another dealer with no problem. I have been following this program since it was a bill. Also, contact your federal legisalture’s office. Additional find out exactually who it was that individual who owned the Wrangler and how he got it overturned. Cash for Clunkers since they touted the story could at least provide you with the damn details. At least they could be good for something.
Unfortunately, federal government and its rules is a moveable feast. Here one minute, gone the next. Good luck. By the way, same predicament as you, kids in undergrad and graduate school. Good Luck.
Joe
How many of you people benifited from the hundreds of billions of dollars the Feds gave to the banks, insurance companies, car manufactures, etc, etc. Remember, those “deals” had basically no government oversite. Remember all the comotion when it was reported that some of the money went towards paying off big bonuses for corporate executives who did a crappy job??
I think the CARS program is the only “stimulus” program that actually puts money directly back into the economy. Let’s see…I have a car that’s a clunker, I trade it in, I buy a new model car that gets better mileage than the one I traded, the $3500- $4500 government voucher goes to the dealership, which in turn the dealership buys another car from the manufacture so they can sell, the manufacturer has to build / assemble another car to replace the one they sold to the dealership and that means they need workers to build another car, the workers gets paid for their work and thus can afford to buy the items they need in order to live.
It doesn’t matter if the vehicle I buy is from an American company or a foriegn company. The fact is that many foreign vehicles (Asian Co. primarily) also employ thousands of US workers to assemble their cars in the USA. In addition the dealerships that sell the vehicles are also employ American workers.
All the while, the banks who made my auto loan, profit by the interest paid by me. When I buy the car, I will pay sales tax and vehicle license fees (which go to the state / county and increases revenues, thus hopefully decreasing budget cutbacks). Now multiply my clunker deal by 250,000 ($1 billion dollars worth) cars sales that might not have occurred this year. How about 1,000,000 cars sales that was propsed in the original bill???
For all you naysayers. What happened to the $300 -$600 dollar stimulus check you got last year from the Feds??? Did you send it back or did you spend it? Do you remember what you spent the money on??? I sure don’t.
At least the clunkers program makes the money go towards a purchase of a large item durable good and hopefully keeps some of our American autoworkers employed.
I hope that the Feds will fund the entire $4 billion that was original proposed.
Started looking at cars a week before the final rules were published. Negotiated with a dealer on a deal the day before the final rules and put down a deposit. When we went to find the title to our clunker, we could not find it. Final rules say the title is a must, when the initial requirements were much more vague. The DMV tells me there’s still a lien on the title even though the clunker’s been paid off for 10 years. Now I have to wait on the bank, wait on the DMV, so it’ll be nearly 3 weeks before we get the title. Even with an expanded program I don’t expect the money to last that long.