Click.Shop.Save On A Car
Dealer Reviews, News, and Cars For Sale
Rep. Joe Sestak Calls for Cash for Clunkers Reform
Congressman Joseph Sestak, a Democrat from Pennsylvania, on Sunday called for “immediate action” to address the lack of payments that car dealers across the country are facing from the Cash for Clunkers program.
In a letter to President Obama, Sestak said only 2 percent of claims have been paid and that four of every five applications have been rejected for minor oversight.
A Confirmation Of Our Data
For weeks consumers and car dealers have shared their experiences with the Cash for Clunkers program on this website; this is no news to our readers.
In fact, we have documented why these delays make perfect sense; one sentence in the Cash for Clunkers bill which said:
“the (NHTSA) Secretary shall promulgate final regulations to implement the Program not later than 30 days after the date of the enactment of this Act.”
The issue of dealers not getting paid is serious and the root cause of many of the Cash for Clunkers implementation and operational blunders all point back to the 30 days Congress gave the NHTSA to create and implement a brand new national program.
Last week we wrote about staffing issues at Citibank and how it is impossible for dealers to be paid in a timely manner. (Read Article)
The problems with the implementation of the NHTSA CARS program have been well documented on http://www.cashforclunkersfacts.com . Thousands of consumers and hundreds of car dealers have shared their frustration with the delays and problems with the NHTSA infrastructure.
If Only The NHTSA Had More Time
I am glad that Representative Sestak is publicly admitting that the implementation of CARS has been less than ideal and that he is seeking financial relief for car dealers.
But I am not hearing that Congressman Sestak is willing to take the blame for the unrealistic implementation schedule that Congress required of the NHTSA which now has negative ripple effects on the financial stability of car dealers and consumer confidence in our legislators.
Basically Congress told the NHTSA ” Please have your lawyers review our bill and create a “handbook” of rules for consumers and dealers to reference in 30 days. Simultaneously, please create from scratch a national registry of new car dealers and a website system that can handle thousands of simultaneous dealer registrations and 300,000 sales transactions in 30 days. And by the way Mr. NHTSA Secretary, make sure all 20,000 dealers get mailed a registration letter, make sure all dealers are trained how to use the NHTSA web based system and please train a call center to answer thousands of calls in that same 30 day period.”
One important lesson to learn from the Cash for Clunkers implementation is how to avoid unrealistic time lines in the future. If our Federal government is going to create programs that interact with the private sector, better feedback must be included to introduce real-world time lines.
- Did the NHTSA not know that 30 days to create a national data processing and reimbursement network was unrealistic?
- Did Congress silence the NHTSA’s objections on a 30-say start for political expediency?
These are key questions that needs to be answered . A clearer understanding of how this 30-day deadline was created could help avoid greater damage to consumer confidence and the private sector in future national reforms or stimulus programs.
33 responses on “Rep. Joe Sestak Calls for Cash for Clunkers Reform”
Copyright 2011 PCG Digital Marketing - www.pcgdigitalmarketing.com - Car Dealer Digital Marketing
Automotive News - Automotive SEO - Automotive Advertising - Car Dealer Advertising - Automotive Microsites - Auto Classifieds
The gov is only paying 2 percent of claims, and rejecting 4 out of 5 applications. per democratic congressman Sestak of PA in a letter to Obama. Makes you wonder what percent of Obamacare claims will? be denied? We don’t have enough cash for the Obamacare clunker with a rolls royce price tag. Tell him to scrap the clunker and let us keep our cadillac
They forgot to mention… When you create the ads…”Don’t forget to mention… The vehicle you are trading must be on a qualification list”. To date, this website is the only one that has specified this fact. I have not seen it anywhere else. And instead of having a phone number tocall with questions, which was overwelmed, they could have posted a site and replied in a timely manner, the truth to the facts, not making excuses. I had one guy tell me on the phone at FuelEconomy.gov that when you post you unlisted vehicle, it will also have you enter a retuen email address….. Ah huh!
If Citibank is deliberately slow walking these claims, how much money can they make just on interest. On three billion for 30 days at 3% annual yield, 8 million. Sweet.
NEWSFLASH: THIS PROGRAM COULD BE OUT OF MONEY RIGHT NOW!
Get out a calculator and consider the following…
-> The average rebate so far is $4200.
-> There are 16,000 registered CARS dealers.
If each dealer did just TWO clunker sales per day since July 27, the $3B is gone.
Cash for Clunkers is going to implode…soon.
Bill F,
If your dealer has 150 without any being paid he will be closed by the end of this. If half the money is already gone, I cannot foresee him being paid on half of his deals. As we the dealers start to get a handle on the ridiculous submission process the rest of the money will be gone by the time he figures it out. I work at a ford store with 2 small locations(approx 100 cars total on each lot). We have someone trying to put our deals in until 11pm eastern time every night. As of right now we have 31 or 32 out and have been paid on exactly 1. So we are only $125000 behind right now. We are gradually learning the process(5more made it past the initial look last night). IF your dealer doesn’t have his stuuf together he’s looking $600000 in the face. I hope he makes it through this as there aren’t many dealers who can throw $500000 in a hole and survive which is what is going to happen for some
where is the governments accountability? a good idea with failed implementation. what are they doing to correct the implementation? what about a time line of plans and actions for resolving this?
We the people own this program and deserve answers!!! GET TO WORK
REVOLUTION!!!!
My Toyota dealer on the South Shore of Boston came through today, I got my car! They have more than 150 deals pending, NONE have been approved yet, but they are going out on a limb and slowly letting the deals go through. They are betting that the approvals catch up to their released deals. This is one hell of a risk to take, and I sympathize with all the dealers caught up in this. As stated all over this website, the whole thing was not well thought out. Hope the letter to Obama helps.
With all of the unemployed folks out there, how about giving them a job to handle all of these submissions. This should keep them employed at least thru Dec and beyond.
Brian, I do have a lot of sympathy for the customers who have gotten a bad deal and/or treatment by a dealer; that should not happen. However, buyers also need to understand the system rests the complete risk on the dealer. As Crazy Ivan put it, the manufacturers are really the beneficiaries, and the dealers take the risk for both them and the buyer, and take any heat from the buyer or the gov’t. And dealers have a lot smaller pocket than, say, Ford or even GM now does.
Keith,
Finally someone with an idea of whats going on. While we spend hours trying to get funded the masses scream about their free money and why that can’t have it now and not later.
I invite anyone who wants to learn to come to my store and try to not only process on of these deals but then try to submit it to the govt website. MAybe some of you should learn about it before you complain. just a thought
What I am saying is that the day we sell the car, we have to pay off the invoice. Then, about 7 days later, ford pays us the rebates tied to the car. If the car has an 18975 invoice, we write the check for that amount. But if you get 2500 in ford rebates and 4500CARS, we are only going to get a loan amount of about 11875 assuming a $500 deal. So we sit on approx $7000 until ford and the govt deems it fit to pay us.
In terms of a trade, IF the vehicle is worth approx $4500, at least we have something to either resell or wholesale. Under this program, we just have to hope the govt pays us our $4500.
As far as backing out of the program, we have delivered our cars from day one to the customer. I am just sick of people crying about not getting their car when they are basically getting $4500 for a car that is prob worth $400. If this program was set up so that the customer was the one on the hook for the $4500 I would like to hear how satisifed you would have been then. You front the money and then hope it comes back to you.
@Crazy Ivan: “So there is a wait time for the $4,500 down payment which, like I said earlier, should be fronted by the manufacturers, the REAL beneficiary of this program!!”
Exactly! Well said.
@Atlee: The C4C money is actually counted as a rebate or really as a cash down would be, not a trade. It’s like you brought in $4500 yourself; the govt’s delay here would be like a dealer holding your $4500 check for a month waiting for it to clear. One or twice might get approved in a dealership, but a twenty or even a hundred sales like that? No way, normally.
@the rest: It’s not jive, and nobody held a gun to your head to buy that alarm or settle on the price you got–any more than anyone holds a gun to a dealer’s head to work with C4C.
However, NHTSA has changed the game several times. In the meantime, for folks who took delivery of their new car, they are driving while the dealer is waiting for the govt’s check to clear. All the while having to support a floorplan cost as if the car is actually still on the lot.
By the way, how about that this $4500 is NOT income for the buyer but IS income for the dealer? Not only do they have floorplan costs, they also end up paying taxes on the amount that buyers get untaxed.
There are a lot of dealers who have not implemented this program correctly and in some cases not fairly or even not legally. However, that doesn’t change the fact that those dealers who participated correctly based on a gov’t promise of “ten days” remimbursement–and let the cars off their lot as they were supposed to–are taking all the risk of the transaction.