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12049621
NHTSA Body Slams Cash for Clunkers Contingencies
What a difference a day can make.
Yesterday we broke the story about our inquiry to the NHTSA about dubious sales contingencies forced on consumers by car dealers and the response that the NHTSA gave us.
Consumers were outraged that the NHTSA basically allowed dealer ”anything goes” sales practices. The NHTSA’s response was basically ”leave and find another dealer”. Sounds like good advice.
Unfortunately for many consumers, there was not another local dealer that had a different policy.
Today, that all changed and it may have been from our post. Read Yesterday’s Post
The day after we made our post and issued a press release about the NHTSA’s response, we see that the NHTSA decided to take a firm public stand and speak out against dealers who are making their own rules.
NHTSA CARS Website Updated
When you go to the official CARS website at www.cars.gov you now can see a clear disclaimer about dealers who are making up their own rules. This warning was NOT there before we made our post and national press release.
Today, we are pleased to see that the NHTSA has also added new verbiage to their CARS FAQ page. Here is the new statement that appears on the CARS 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
Practical Advice: Before you go to a local dealer, call and ask them if they will deliver your new car when you come in and bring in all the proper documents or will they hold your new car until they get approval from the NHTSA.
Right or wrong, just know what you are going to get when you deal with your local dealer.
Where Do We Go From Here?
Consumers and dealers are now in a pickle. Some dealers responding to the NHTSA public statement have vowed to stop accepting CARS sales. Others have resisted releasing new cars that have been put in hold. Consumers are demanding dealers abide by the NHTSA statement and many dealers are balking.
This is just another chapter in the Cash for Clunkers fiasco. A program that was rushed to market and was not planned to handle both the consumer demand and the need for dealers to have prompt confirmation and payments.
What do you have to say? Join the dialogue below:
In the end, this program may have created MORE bad will between consumers and car dealers than any single program or idea in the automobile industry to date.
68 responses on “NHTSA Body Slams Cash for Clunkers Contingencies”
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I bought my car on June 24th and hereAug 27th still dealing with dealership now telling me I have to return car cause it wont go through on cash for clunkers (coggin Nissan) on atlantic blvd Jacksonville Fl I think its absolutely ridiculous I sifned the paperwork was approved for loan a month ago and my trade in that was given 4500 for trade in they have had entire time what they did with is anyones guess….can they do this is it legal ….frustrated beyond belief
I bought today and had my new car held hostage as well. I got to drive my clunker back home unaware that I shoudl not have allowed this to happen.
I plan to go in tomorrow and demand politely that my car be released. I did not sign any contengency, and paid a $1000.00 deposit on my new car.
Next step will be calling all of the local media, police, and a lawyer.
Alan said … “Registration on the other hand has no warning other than remembering to buy a new tag around your birthday”
Move to NY Alan. Here we get all of the paperwork sent to our homes weeks ahead of the expiration date. This is so we have enough time to go to the bank to take a out a loan to pay for it all.
I traveled over 50 miles because the dealer only less than a mile away were selling at MSRP for the program. Who sells at MSRP? The NHSTA may have made atatement about the way dealers were doing business, but what did that do? You had to go elsewhere. Great job Mr Government Agencies. A great idea gon “SOUR”!
From my point of view the program simply overwhelmed dealerships and the government with paperwork and red tape. The men and women working at the dealerships are only in it for the money, and the men and women working for the government are all do-boys, which still overwhelms the real decision makers when it comes to crunch-time. Also, the dealerships make more money off the bigger, less fuel efficient vehicles than they do the smaller ones; meaning that they only had a handful of the eligible vehicles on their lot to begin with.
Back to the red tape, I must say it is bogging down the decision makers and causing several deals to be botched due only to long hours and headaches. I tried to trade in a 1985 Iszuzu Trooper that gets horrible gas mileage and pollutes the air, they rejected it because the tag expired and was renewed less than a month after expiration. The insurance did not lapse, however, so it wasn’t some plot to steal money from the government it was more of a common human error: forgetfulness.
My point to all this is simple: stop frustrating everyone and give the dealerships their money for deals made on vehicles which have obviously had insurance and been registered. Insurance usually has to be canceled to show a lapse, since they require an extra month of payment upon initial set-up; so if you forget a month and get behind you are still covered..bugged about the payment but still covered. Registration on the other hand has no warning other than remembering to buy a new tag around your birthday, and I’m not sure about you all but “buying” anything around my birthday is usually forgotten.
16 days since we signed a photocopy of our title (not the real one) so the dealer could submit paperwork to CARS. They haven’t tried to have us sign contingencies and we still have our clunker, but we’re getting frustrated waiting to get our new car (which is sitting on their lot).
On one hand, I can understand the dealer’s view that if the money runs out or some form isn’t signed properly or some paper pusher is having a bad day, they could be stuck for the $4500. They’re a local dealer with a decent reputation and they’re just trying to stay in business.
We, however, want our new car before our old one dies. If it does die we’ll just have it towed to the dealer and say, “yes, the regs say it’s supposed to be running and drivable, which it was when we made the deal”
14 days and counting. Regardless of the clarified rule, our vehicle is still being held hostage. Clunker is not safe to drive and was left at dealership. We were thankful for the program at first but now we are just completely frustrated with the whole thing. We’ve been able to borrow cars from family but will be forced to rent a car to get to work if this goes on much longer.
Casey, you have a point. Earlier, you wrote: “Have you tried to speak with the gsm. If your like most cfc customers you have great credit and are good and honorable folk. Let him know your on his side and if there is a problem you would be willing to be fair in resolving anything that may arrise I’m confident most dealerships gsm’s would allow deliver. Being nice and sincere with your dealer always reults in better customer care.”
We signed paperwork on August 3rd. Title, insurance, trade–our clunker for the new model purchased–are no problem. Still, our dealer had us sign a contingency release requiring us to pay the $4500 if the government did not approve the deal. As it was presented, we believed it was part of the overall government paperwork. (It sure looked like it was.)
Our dealer now has both our clunker and the new car on its lot for two weeks. The government is pressuring the dealer to release our new car, and the government is instructing us to avoid signing contingency releases. (Too late.)
We wanted to have a contingency plan to rate our clunker as a trade in should the CARS voucher fail. The trouble is, our dealer wants to appraise our vehicle for 60% of its Kelly Blue Book value (the dealer-trade-in value from KBB). We wanted to start at the KBB valuation and negotiate, but they are not willing to budge.
By the way, I have subsequently read the entire 136-page Rule and 20-page Ammendment (from cars.gov). It is clear all of the things being said now were in those original writings, but they are too voluminous. How many consumers read all the way through both of them before heading out to car shop? While nothing has essentially changed since these documents, the newly issued clarity should have been made public up front.
Where is the assistance for those, like us, stuck in between the former cloudy guidance and the now crystal clear guidance? We fear to take the car — the deal is good (I’m sure of that) but the chance for minor paperwork error is very high. While this won’t nullify the voucher, it will require the dealer to re-file and begin waiting all over again. If we have obligated ourselves to cover the $4500, what incentive does the dealer have to take the high road?
Casey said, “If not come see me our dealership has 30 smiling drivers.” Yes, but what about those who find ourselves stuck in the middle after the fact?
- Bill