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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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@ D.Clark…probably not. Call the NHTSA hotline, the OIG hotline, your State’s Attorney General, and your state’s DMV enforcement office.
I just purchased a new car through the “cash for clunkers” program and was not told till AFTER I signed all the papers and handed over my cash payment for the car, that they were going to hold the title until they receive their 4500.00. Can they really do that???
As a consumer, my dealer sent me home in my car and won’t deliver the new car until he gets paid. However, if I decide to cancel the deal, and try a new dealer, it won’t work either. I think the government will reject my application because they already have one in for me. Thoughts?
I believe the spirit of the article above is: do your homework. Make certain (by asking) what process your dealer plans to abide by in terms of each step of the CFC deal. Be forward – protect yourself – understand what’s going on in your deal. Ask the question you may feel dumb asking. A dealership will speak to you as if you understand the terms and factors associated with a deal. That said, they should also explain to you any part of the deal you may not understand. Remember that without you, the customer, the dealership cannot be in business.
The recent statement on the CARS website, being written in all capitals, is clearly written by an outraged breathless bureaucrat who has never spent a day working within the private sector.
What are the consequences for CARS / DOT /NHTSA not following the law as passed by congress and signed by the president of the USA by not funding dealers within 10 days of transaction submission:
See page 4 of this pdf: http://www.cars.gov/files/CARS-Law.pdf
“(2)
establish procedures for the reimbursement of dealers participating in the Program to be made through electronic transfer of funds for the amount of the vouchers as soon as practicable but no longer than 10 days after the submission of information supporting the eligible transaction, as deemed appropriate by the Secretary;”
Reading the law as enacted by congress further states:
“Provisions(1) VIOLATION- It shall be unlawful for any person to violate any provision under this section or any regulations issued pursuant to subsection (d) (other than by making a clerical error).
(2) PENALTIES- Any person who commits a violation described in paragraph (1) shall be liable to the United States Government for a civil penalty of not more than $15,000 for each violation. The Secretary shall have the authority to assess and compromise such penalties, and shall have the authority to require from any entity the records and inspections necessary to enforce this program. In determining the amount of the civil penalty, the severity of the violation and the intent and history of the person committing the violation shall be taken into account.”
The 10 day payment requirement falls under section d, as referenced in the above violation section. It appears that this suggests that the NHTSA or DOT is liable to the US government for up to $15,000 to the US government for each instance in which a valid CARS submission was made, and payment to the dealer was not made within 10 days? If they are going to follow this law as written, the 3 billion will be gone sooner than anyone thought.
From the article: 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.
800-424-9153 is not the fraud number, it is the TTY number.
I’m in the same boat as many – I’ve had everything in order since I visited the dealer on June 20th (expecting to wait until July 1st) and am still waiting for my car which sits on the dealer’s lot. Dealer didn’t submit info until 7/31 and insists I must wait until they receive approval; I have to start loan payments soon for a car I don’t have. This has been very frustrating. No response to emails and phone calls today. Next call is to OIG in the morning, although from others’ emails it seems my approval should be coming any time now.
theresa says:
August 13, 2009 at 12:14 am
(866) CAR-7861. if youcall that number it says “thank you for calling the national digital replay service” and nothing else just dead air.
————-
The number above, taken from the update posted on cars.gov may be transposed. Try (866) CAR-7891
For instance, here is part of a post by another consumer:
“Matthew Cullen says:
August 12, 2009 at 8:33 pm
I have called the OIG they are investigating. The OIG phone number I actually got to speak to a representative and now I have tracking info on the investigation. You can’t get much more up front than “yes they are not allowed to hold the vehicles” combined with “Here is your report number and here is your user key to access electronic information regarding your report”
Here’s another fraud hotline taken from the body of the above article:
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.
————–
Others here have reported that their complaints were taken by the OIG, so it’s curious that the guy you spoke to deflected your call?
Maybe try that number again tomorrow too?
(866) CAR-7861. if youcall that number it says “thank you for calling the national digital replay service” and nothing else just dead air.
I did call the OIG and spoke with a very nice man who informed me that all calls concerning the “consumer vs. dealer” subject had to be handled by the people at the Cars.gov phone number and of course the cars.gov folks are gone for the night. So, tomorrow starts another day of phone calls and frustration. Just really hope that Quality Pontiac GMC in Alton, Illinois doesn’t expect me to be a return customer after this ordeal.
joe says:
August 12, 2009 at 11:00 pm
my dealer says he’s not releasing anything without aprroval, he doesn’t care what the goverment says.
Well call them and ask if they want to risk getting paid for your car or all their deals. Because if they get pulled from CARS they might not get paid for the others either.
From the Rule:
Anyone who thinks illegal activity related to this program has occurred may also
call the Hotline of the Office of the Inspector General (OIG) at the U.S. Department of
Transportation. The toll free number is 1-800-424-9071. The OIG Hotline is an
important tool for reporting allegations of fraud, waste, abuse, or mismanagement in the
Department’s programs or operations, including the CARS program. The Hotline is setup
to receive allegations in a variety of forms, including by email (hotline@oig.dot.gov),
regular mail (DOT Inspector General, P.O. Box 708, Fredericksburg, VA 22404), fax
(540-373-2090), and the toll free number identified above. The OIG Hotline is open 24
hours a day, seven days a week.”
My dealer has been holding my new car hostage for 2 weeks, I told the dealer they were comitting fraud by submitting my VIN to the govt’ and requiring me to keep driving my clunker. I was told “they don’t have satellites taking photos of what you are driving” also, my dealer is defrauding General Motors (or whatever company that is nowadays) by claiming that I took possession of the new vehicle on August 5th. I want the NHTSA to tell me how I’m supposed to take my deal somewhere else when my VIN is already in the clunkers database.
At the Preston Automotive group we have sold and DELIVERED customers from all over. We have a huge selection of Ford Lincoln Mercury Mazda Nissan and Hyundai all at one location. We are worth the ride from any where in the USA. You can reach us at 410-770-6757 or email me @ dhw@prestonmotor.com. We have a great selection and more arriving daily.
-> “my dealer says he’s not releasing anything without aprroval, he doesn’t care what the goverment says”
Well…they didn’t follow the rules in the first place, so why start now?
inspector general 1-800-424-9071
my dealer says he’s not releasing anything without aprroval, he doesn’t care what the goverment says.
has anyone’s dealer refused to comply with the government’s statement today on the cars.gov site? My dealer said their attorney’s told them, and the national auto dealers association is advising their members to NOT comply with the directions on cars.gov to release the vehicles to the buyers. What?! The auto dealers association is supposedly meeting with the NHTSA to get them to remove that statement from the site since the govt can’t get their act together and get the deals “approved”. Anyone else hearing this? I’ve filed my complaint with the OIG. This is a ridiculous mess.
Read about the announcement at cars.gov and notified my dealer of what was on the website. I signed the purchase contract on August 1st and was told I was waiting for approval. Well, tonight I heard that my dealer will start releasing vehicles tomorrow which means I should be taking ownership of my new vehicle tomorrow. Yipee!!! Should know better than nothing is easy when you are dealing with government.