Factory Orders Allowed Under Cash for Clunkers
The NHTSA announced today that consumers can order a new car NOT in stock in local dealer inventory and still qualify for the Cash for Clunkers rebate. The move came as the NADA and other automotive groups applied pressure on the NHTSA; dealers around the country have complained that low inventories are preventing them from meeting local demand.
Cash for Clunkers: Wildly Popular or Just Wild - You Decide.
Dealers who want to file deals for an ordered vehicle must first obtain the new car’s vehicle identification number from a manufacturer, NHTSA said in a statement. Reimbursement requests still must have all required documents for the trade-in vehicle.
This adds yet another layer of complication to Cash for Clunkers August sales.
Factory Orders – Who Wins?
This decision is a win for consumers in local markets that have depleted inventory and a loss for dealers who took the risk to stock up on popular cars before the Cash for Clunkers program started. Dealers who have contact us have mixed opinions on today’s latest change in CARS rules.
One dealer commenting off the records stated
”I invested over $500,000 to bring in extra cars for the program because I knew it would be popular. I thought that I would have a strategic advantage and be rewarded because my local competition did not stock up. Today’s decision took that away advantage. This is just another example how changing rules have made it difficult for dealers to support the program.”
On industry insider said that Ford was caught unprepared for the demand and that Ford dealers have been the hardest hit by lack of inventory. The industry veteran that we spoke with said that the NHTSA concession today seems to favor the Big Three US automakers that are low on inventory while foreign manufacturers seem to have more supply.
This is truly a game changer and we will have to see how this plays out.
On A Related Note
Dealers and consumers have been active on our forums regarding yesterday’s announcement that dealers cannot hold new cars on transactions that have all paperwork submitted. Read our forums to see that many dealers are thumbing their noses at the NHTSA and consumers saying “NO WAY BABY”.
Interesting times indeed.
Official NHTSA Text
Here is the official language from the cars.gov website
In response to overwhelming interest in the CARS program, NHTSA has clarified that consumers who want to purchase new vehicles not yet on dealer lots can still be eligible for the CARS program. Dealers and consumers who have reached a valid purchase and sale agreement on a vehicle already in the production pipeline will be able to work with the manufacturer to receive the documentation needed to qualify for the program.
In order to submit a request for reimbursement for the amount of the CARS credit, a dealer will have to enter into a binding sales or lease agreement with the purchaser, obtain the Vehicle Identification Number (VIN) of the new vehicle, collect all of the necessary documents that are required by the CARS rules, take possession of the trade-in vehicle, and complete all of the steps required by the Summary of Sale/Lease and Certifications Form.
If the Manufacturer’s Certificate of Origin (MCO) or Manufacturer?s Statement of Origin (MSO) is not yet available at the time the application is submitted, NHTSA will require dealers to submit a document confirming that the vehicle has been ordered from the manufacturer, which must include the VIN of the new vehicle. At the time the vehicle is delivered to the dealer and the purchaser picks the vehicle up, the dealer is required to submit to NHTSA, by e-mail to carsmco@dot.gov, a copy of the MCO or MSO (or, in the case of certain sales in Michigan and California where no MCO or MSO is created, a copy of the invoice and an application for title and registration) and include the appropriate CARS invoice number in the e-mail subject line.
Tags: cash for clunkers sales, factory orders, preorder allowed
28 Responses to “Factory Orders Allowed Under Cash for Clunkers”
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Karen E says:
If the govt can’t handle a few car rebates how could they ever handle our healthcare?
Ask your grandparents, your mailman, and the veteran who lives in your neighborhood.
As far as your rant against the rule of turning in your clunker (imagine that being a rule in the Cash for Clunkers program), who made you wait until the car you wanted was all sold out?
Nevertheless, there have been a large number of dealers that are blatantly committing fraud by letting the customer keep driving their clunker. Have you called around?
Order a new car but “take possession of the trade-in vehicle”? Excuse me but I only have one car and I rely on that car every single day, how I can give the dealer my clunker and then wait for several days or weeks until the new car arrives? Doesn’t anybody else have a problem with this? I can’t afford to rent a car, my work schedule does not let me use public transportation and car pooling does not work either because of my whacky work schedule, I can’t leave my old car with the dealer! Aargh! I really need a new a car but any car I could possibly consider or afford is out of stock. I am screwed, not fair not fair. If the govt can’t handle a few car rebates how could they ever handle our healthcare?
Sorry guys, they should have just said as they advertised. If your vehicle is a gas guzzler, you have documentation that you paid the high insurance rates, regitration, etc. trade it in for a vehicle…. any vehicle that would contribute to reducing the demand on fuel. And Mr. Government…. pay the dealers what you are promoting. I would think that dealers would be happy, they arent losing money, the consumer stimulates the economy a bit, and in end, recycle all that heap of scrap metal to make something better with. But that make too much sense doesnt it?
When this news came out last week, I was delighted to see factory orders were now allowed. So I called my dealer, said “let’s do the deal at the price we agreed to yesterday, but do it today for the car that’s on its way from Japan.” Turns out state laws prohibit sale of a vehicle that’s not on the lot. They won’t sign any papers with me until then, which means they can’t apply for a CARS credit (no binding agreement). Meanwhile, the CARS money is disappearing fast!
Howard,
You can’t do a C4C deal until the dealer can get the VIN #. The dealer knows how to get it, but the vehicle has to already be in the production pipeline for him to do so.
I TRIED TO ORDER A NEW CAR AND SEVERAL DEALERS TOLD ME THEY COULD NOT COMPLETE THE ORDER BECAUSE THEY DO NOT HAVE THE VIN # HOW AM I GOING TO ORDER IF THIS? HOW DOES THE DEALER GO ABOUT GETTING THE VIN#? TIME IS RUNNING OUT AND I KNOW EXACTLY WHAT I WANT BUT I AM AT A STAND STILL.IF YOU COULD PLEASE GET BACK TO ME ON THIS ASAP.
THANK’S FOR YOUR HELP
HOWARD
real simple, I’m waiting patiently, going to pick my car up all smiles and polite. Then I’m going to sue the ———— out of my dealer in small claims court where it is real easy for the comsumer to win.
2 weeks and still no delivery, dealer will not deliver car and ford advised to call fraud line. why waste time when there is no enforcement by the government. vouchers should have been given to consumers to avoid dealer abuse.