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Cash for Clunkers Consumer Protection Resources
Before you head out to purchase a car under the Cash for Clunkers program, we recommend that you read three articles that consumers have told us have helped them make the best use of their time.
Understand that dealers have limited resources that have been over-taxed in the past 30 days because of the Cash for Clunkers program.
Going to a dealer unprepared is a waste of your time and theirs. To make the best of your time and dealer resources, please take a few minutes to read these articles.
Three Articles To Read
1. Read our expanded and updated Cash For Clunkers FAQ page which has additional questions and answers that will help confirm that you qualify. Read Article #1
2. Inspect our updated Cash for Clunkers Checklist which you should read and print out before you go to a local dealer. Read Article #2
3. Understand your purchasing rights and how the Cash for Clunkers transaction should be made. The NHTSA recently clarified how a CARS sales transaction should proceed. Read Article #3
Some Final Points
1. If you understand the current tug and war between dealers and the NHTSA, call ahead to your local dealer to see if they are releasing new cars when you make your Cash for Clunkers trade or are they holding the car until they get approved. This way you know in advance what to expect; right or wrong.
2. Since you can order a car that is in production or on its way to the dealer, your choices have expanded but keep in mind that cars delivered in September may have different rebates and incentives. Your total costs can be higher if September factory rebates change. If you purchase an in-stock car in August you have KNOWN factory rebates. Make sure you ask your dealer how factory rebates will be handled.
3. Be patient with your local dealer. Most local dealers are “out of pocket” over $100,000 and larger dealers over $500,000 and every dealer is worried about getting paid. If you do your part and have all your paperwork in order you will make the dealer’s staff more comfortable with accepting another CARS trade. Call in advance to see if they continue to accept CARS sales and if they can obtain the car you want.
16 responses on “Cash for Clunkers Consumer Protection Resources”
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Armando Guerra,
If the dealer refuses to fill in that blank on the “Deal sheet”, the submission will be rejected. Can you find another dealer?
The law and Rule state that the dealer can only keep $50 of the scrap value. Unfortunately, there is a footnote in the Rule that says the scrap value is negotiable between the dealer and the purchaser. Just vague enough to let dealers get away with keeping the scrap value if the customer isn’t aggressive about demanding it.
Who gets the money for the scrap value? The customer or the dealer? What if the dealer states firmly that there is no scrap value and refuses to fill in that information in the documents?
I had signed a purchase agreement with a car dealer for a toyota Yaris as a trade in for my clunker and put a deposit down for $250. The terms of the agreement were 0% down and 0% financing for five years. Our clunker value is $4500. The dealer has now stated that we need to pay 25% interest per month. Is this fair?
Please respond soon.
Thankyou,
Mary Ann Mikus
Indy, I concur with the intended point of your “Dealer Responsibilities” post. And I assure you that the dealer sitting on in excess of $.5M on death row is properly minding the details of such responsibility with zeal.
And then almost as if prompted, Paislee Flores makes my counterpoint in six words! One must ponder, then: how long has the “Checklist” been available on this web page? Long enough, yes?
Daily I encounter consumers that, I can only conclude, are now driving from lot to lot already aware that they don’t qualify and yet just hoping some salesperson will sponsor their desire to cash in anyway despite the inevitable disqualification.
The auto sales industry has been saddled with a completely new set of issues and complexity that has surpassed the learning curve of a significant percentage of otherwise skilled auto sales representatives. And by the time the average consumer and salesperson really have come to understand it, it will have concluded weeks hence.
The dealer page of cars.gov now displays this:
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.
Dealers must honor any other advertised rebates or discounts in combination with the credit extended to the customer under the CARS Program.
Dealers must reduce the sale/lease contract price by the appropriate CARS Allowance of $3500 or $4500 in order to be reimbursed and must certify that they have done so in the application for reimbursement.
Dealers must disclose to the consumer the dealerÕs best estimate of the scrap value of an eligible trade-in vehicle.
Dealers must take possession of the trade-in vehicle and certify that they have done so prior to submitting a reimbursement request. Consumers may not turn in the trade-in vehicle later.
Dealers must transfer the trade-in vehicle to a salvage auction or disposal facility participating in the CARS Program.
Dealers must disable the engine of the trade-in vehicle prior to transfer to a salvage auction or disposal facility.
What cars are eligible for purchase
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.)
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?
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.
- Bill
Indy writes to Bob JR:
“How damn hard is it to check your insurance documentation?”
I ask myself in 4 out of 5 cases while being the messenger of bad news: “How damn hard is it to check your [own] documentation?”
Sorry, Indy, I cannot agree that the consumer’s ignorance of the provisions puts the responsibility on the dealer. This is a shared responsibility and it starts with the consumer being able to CERTIFY his/her own qualification.
Doing the homework is not optional.
Bob Jr & Indy:
Did you sign a CARS document that included the following statement under the “Purchaser Certifications” section?
“The trade-in vehicle has been continuously insured for a period of not less than one (1) year prior to the date of this transaction (not applicable to trade-in vehicles registered in
New Hampshire or Wisconsin).”
Additionally, in the FAQ on the CARS website, it lists the following answer regarding contingency documents:
Answer: NO. However, be aware that to participate in the CARS program you must certify under penalty of law that all information you provide is true. If your CARS program credit is denied because of a false statement made by you, the dealer may take action to recover the money or vehicle regardless of whether you sign such an agreement.
Clarification of my previous post:
This part is not my opinion, it’s FACT:
It’s the dealer’s responsibility to make sure your clunker, including all documentation, properly qualifies BEFORE IT ACCEPTS YOUR CLUNKER AND EXTENDS THE CREDIT!!
The rest of the post is my opinion.
@ Bob JR…it’s correct that you aren’t eligible for the C4C rebate if you had a lapse in your insurance in the previous 12 months. But, here’s my opinion: It’s the dealer’s responsibility to make sure your clunker, including all documentation, properly qualifies BEFORE IT ACCEPTS YOUR CLUNKER AND EXTENDS THE CREDIT!!
How damn hard is it to check your insurance documentation? This is outrageous conduct on the part of the dealer!
If you have the heart for it, try to fight it. The law, as far as the CARS program is concerned, is on your side. Contact your State Attorney General’s Office, and try to find an auto fraud attorney and/or consumer advocate agency that will help you.
Please keep us posted on how it goes for you.
Good luck!
So I went into a dealership on August 7th with the expectations of buying a used vehicle. The dealership noticed what my old car was and said that it would be eligible for the C4C. So, with that in mind, I looked at the new cars and settled on a brand new vehicle. This was a Chrysler dealership where they doubled the “rebate”. So I dropped off my clunker, signed all the paperwork with the loan, etc. I didn’t however, sign a contingency document. Today I received a phone call saying that they need to have my new vehicle returned because it turns out I wasn’t eligible due to the insurance part. Even though I gave them everything, I had a lapse and it means that my vehicle was not eligible and they want to reverse the transaction. Is that possible? I wasn’t aware of exactly what the C4C guidelines were and they said they would “walk me through it” so I understood.. Can someone shed a little light on what to do here?
If anyone out there is just catching up on this info, MAKE SURE YOU READ EVERYTHING IN THESE ARTICLES.
Then, do yourself a favor and read the SPEAK UP forum, going back as far as you can. You will learn a lot about what people have been through.
Then, listen to good old Stanley:
1. Know what you want and what you’re willing to pay.
2. Don’t be afraid to WALK AWAY if you don’t get what YOU want.
3. Don’t be afraid to call as many dealers as it takes to find YOUR best deal.
4. REMEMBER: YOU are the customer! DO NOT LET DEALERS TAKE YOU HOSTAGE!
…also ask what you’ll be getting as scrap value after the dealer’s $50 payment. Some dealers are crediting $150, some zero.
@Dave
When we say not listed on cars.gov we are implying http://www.fueleconomy.gov since its off the cars.gov menu on the tab marked “MPG Rating”.
If the car is not rated, the dealer will not process the transaction. The purpose of this statement was to say that if dealers are not able to generate the side by side mpg comparison, they can’t submit the deal.
It’s up to the consumer to get their car listed on fueleconomy.gov, just like Don Asay did to get his 1997 Jeep Wranger listed.
Just read article #2, and there is a slight possible confusion of clunker qualifications:
“If your car is not listed on http://www.cars.gov a dealer will not be able to process your sale.”
versus
“A print-out of the http://www.FuelEconomy.gov website page that shows that your clunker qualifies. This will save you time from assuming that your car currently qualifies.”
Well, some cars fit within the CARS fuel economy limits, per fueleconomy.gov but are not listed as eligible (nor ineligible) cars on the cars.gov site (the PDF list). So do these “limbo” or “gray area” cars actually qualify or not? For example, a 1988 Chevy Astro passenger van.
It would have been simpler if CARS.gov simply stated your clunker must be on our eligible cars list, period (no need to check fueleconomy.gov) OR your clunker must have “new” combined fuel economy of 18 mpg or less (per fueleconomy.gov), period (no need check any list of eligible cars).
I guess the end result is for dealer to decide if those “gray area” cars are clunkers? And then for CARS program to decide whether the filed application for those “gray area” cars are valid clunkers or not?