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NHTSA To Consumers: If The Deal Stinks – Walk Out
Consumers have been sending us numerous emails asking questions about dealer specific sales practices that are not included in the Cash for Clunkers bill or the NHTSA Final Rule document.
Specifically, consumers are concerned about signing special agreements that they feel uncomfortable with executing to get a new car under the CARS program.
From feedback submitted to us from consumers we were compelled to send an email to the NHTSA asking for some clarifications on dealer sales practices reported by consumers.
Here is the question we posed to the NHTSA via email and their response via email:
Our Question
Will the NHTSA be commenting officially on three practices that consumers are reporting to be commonplace:
- Dealers accepting qualified clunkers and have all approved paperwork but holding back delivery on the new car until NHTSA approves deal
- Dealers requiring consumers to sign documents that make them liable for the rebate if the application is not approved.
- Dealers accepting qualified clunkers and have all approved paperwork but sending consumers home in their clunker until sales is approved.
NHTSA Response
The NHTSA is aware that dealers have taken various approaches with consumers to seal deals. However, NHTSA strongly encourages consumers to do their homework before entering into a deal and remember there are numerous dealerships partaking in the CARS rebate program. Consumers should shop around to get the best deal that suits them.
www.cars.gov is the only official site for the CARS rebate program. If consumers or dealers have complaints, they should contract our officer at (1-866-CAR-7891, TTY 1-800-424-9153 or if you suspect fraud, call the Office of the Inspector General of the U.S. DOT on 1-800-424-9071 or email at hotline@oig.dot.gov
Translation
If you don’t like the way in which a local car dealer is making the CARS transaction, go to another dealer.
The NHTSA does not look like their are going to step in the role of becoming a regulator or a prosecutor. So, basically they are saying that they are aware of such practices and it is up to the consumer to decide if they want to do business with a dealer under those circumstances.
They also reminding consumers that if you have a gripe, its important to call their fraud hot-line 800-424-9153 or call the Inspector General at 800-424-9071.
Sharing your complaints on this forum IS IMPORTANT for consumer awareness and support. However, as a consumer website, we cannot escalate or act on any complaints posted on this site.
So the NHTSA is reminding consumers that if they feel they are being taken advantage of, they need to report it immediately to government website and government support services.
UPDATE – Wednesday August 12, 2009
The day after we published this article and issued a press release about varied dealer sales practices, the NHTSA came out with an update to the www.cars.gov website. We would like to believe that we were the first to bring this to a national forum and caused the NHTSA to speak about this matter publically.
Initially the NHTSA did not want to make a stand and now it is clear that they want to clear up the confusion. The end result is that some dealers are pulling out of the CARS program because they don’t like the risk.
Here is the statement now appearing on the NHTSA website:
We’ve heard that dealers are asking consumers to sign agreements with contingencies when they participate in the CARS program.
CONSUMERS ARE NOT REQUIRED TO SIGN CONTINGENCY AGREEMENTS TO PAY BACK THE DEALER SHOULD THE CARS CREDIT BE REJECTED.
We’ve also heard that dealers are asking consumers to keep their “clunker” until the deal is approved by NHTSA.
IF THE DEALER HAS THE NEW CAR IN STOCK, THE DEALER MUST ALLOW YOU TO TAKE POSSESSION OF THE NEW CAR BEFORE THE DEALER MAY SUBMIT THE CREDIT APPLICATION TO THE GOVERNMENT. PLEASE REPORT ANY DEALER TO NHTSA THAT DOES NOT ALLOW YOU TO TAKE POSSESSION OF A NEW CAR PURCHASED UNDER THE CARS PROGRAM. PLEASE CALL THE CARS HOTLINE AT (866) CAR-7861.
To find out more about dealer contingencies click here.
106 responses on “NHTSA To Consumers: If The Deal Stinks – Walk Out”
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1197
was never given scrap estamate value till i finaly said .dont i get something for my clunker they said they would check and get back to me,well they did and they said they got there 50 but i get nothing. my van was about 3900 lbs i think i should have got a few bucks for ot ot was a 1990 gmc not a newer plastic one i know i should be thrilled i got the cars program money but come on its still my money not there they get double dipping and triple dipping thats wrong.
I clunkered a car on tuesday the 18th. I took delivery of my
new mazda 5 on saturday. I was asked (a.k.a given no choice,
except to walk away from the deal I guess) to sign a very open
ended contigency agree. Unless something flooky happens. I turned in titles, insurance, etc. Had everything. So unless there are dealer typos on the sumbittal or something. I have correct documentation. My question and concern is the contingency that states to legalesse I cant quite understand that the dealer can get
the $4500 if the government not only doesnt pay, but “delays” as well. Now my wife it all up in arms about how I signed such an agreement. Now I”m wondering if I’m screwed because I signed some document that I seemed iffy. Anybody smart about this kinda stuff have any comments?
from cars.gov
Dealer Responsibilities
——————————————————————-
Dealers must be registered to participate in the CARS Program.
Dealers must provide NHTSA with required documentation to show that a transaction meets all eligibility requirements to be reimbursed for the credit extended to the consumer.
Dealers may not tell consumers that they are required to pay back the dealer credit amount if the government rejects the CARS transaction.
The problem is consumers who signed a contingency agreement *before* the government made it clear this was inappropriate. Our dealer is now on our backs to pick up the car because they are under the gun. (Having already filed the reimbursement voucher but not having delivered the car puts them in a situation which could be considered fraudulent.) However, they will not release our “contingency paperwork,” which now seems to me to be just as unlawful. Nevertheless, we are afraid to pick up the car. What if, after a six week delay, the voucher paperwork is returned for a minor error? The dealer might just press us for the $4500 rather than re-file and wait another delay cycle.
I want the government to CLEARLY STATE that it is ILLEGAL for the dealers to require the contingency guarantee. They seems to suggest this is the case, but the guidance is not clear enough to persuade our dealer to release the new car to us.
- Bill
Thank you, I will!
We have 3 cars that qualify. One we wer told it did not because we had to swith insurance for a short while from one to another because I needed heat and am disabled and the othr did not have it. Insurance was paid contnuously and register the full time. the other vehicle we were told that thee was a 4 day laspse in registration. It was insured the full time but because I could not get there till 4 days after because ofmy disability and my husband could not miss work we were again denied. So is there anything to do. Thanks Marti