Cash for Clunkers Generates Interest, Sales Along With Confusion, Complaints
By Michelle Krebs July 30, 2009Cash for Clunkers is generating new-car sales and showroom traffic for dealers but is also
creating confusion and drawing complaints with consumers and dealers.
As of early Wednesday afternoon, the Department of Transportation had processed 16,351 transactions under the officially called Car Allowance Rebate System (CARS) for for a total of $68.9 million worth of deals through 22,300 dealers registered to participate. Congress has appropriated $1 billion for the program, which runs through November 1 or when the money runs out and includes costs to administer the program.
As of Thursday morning, the CARS site showed $858 million remaining to fund the clunker plan.
The government's hotline has been lighting up as well. A DOT spokesman told AutoObserver.com Wednesday that the hotline (866-227-7891) used by dealers and consumers is averaging 56,000 calls a day. The CARS.gov Web site has had 5.8 million visitors since it went live.
At Edmunds.com, parent of AutoObserver.com, consumers have been actively engaged on Edmunds' CarSpace.com message boards and Edmunds Answers asking questions, seeking advice, sharing experience and lodging complaints about Cash for Clunkers.
Mileage Madness
Most of the confusion -- and complaints -- so far on Edmunds.com sites involves an update by the Environmental Protection Agency (EPA) of combined fuel economy figures on the eve of the Cash for Clunkers launch that disqualified some vehicles that were previously eligible as clunkers.
A DOT spokesman said Wednesday the department expected to make a decision on how transactions using the old EPA numbers should be handled. As of Thursday morning, no decision had been made.
A number of Edmunds' forum participants said they signed paperwork with their dealers based on the old EPA numbers and before the official July 24 kick-off date of CARS. Now that the car no longer qualifies as a clunker, the dealer wants to rescind the deal -- or consumers are worried the dealer will come after them for the money they won't get from the government on the clunker trade-in.
In those cases, the DOT has said the dealer is on the hook since they were advised not to commit to transactions until the program officially launched.
Blunders and Bad Practices
Other complaints on Edmunds.com sites involve blunders made by dealers in calculating the eligibility of the clunker and for what amount -- either a $3,500 or $4,500 voucher.
One Edmunds' forum participant said the dealer miscalculated his deal at $4,500 when it was eligible for only a $3,500 voucher. Now the dealer is calling the customer to give back $1,000.
Another Edmunds' forum participant said the dealer was trying to charge $1,100 of the voucher to process the transaction even though dealers are being paid by the government for the processing of transactions.
Other dealers are trying to charge consumers interest on the voucher funds from the time the transaction is processed until the dealer gets paid by the government.
DOT spokesman Rae Tyson said recourse depends on the type of problem. If the matter is specific to the CARS program, consumers should call the hotline number at (866) 227-7891. If it is a general consumer problem with a dealer, they should "seek recourse locally," possibly through the state attorney general's office.
"We're not in a position to give advice to consumers," Tyson said. "Depending on the nature of the problem, the quickest thing might be to seek recourse locally. With the volume of transactions we're dealing with, it will take awhile for us to be responsive."
Tyson said the government has the capability of handling 12,000 transactions simultaneously. "We have a lot of horsepower as far as our computers are concerned so the physical processing of a transaction should go fairly quickly." --Michelle Krebs
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"As of Thursday morning, no decision had been made."
Will they hurry up and decide one way or the other? Those of us whose car mileage has been changed need to know what the story is so we can decide how to proceed. They are just hanging us out in limbo waiting.
Read this article: The Real Reason for the "Cash for Clunkers" Suspension. The ex car salesman blog shares exactly why they stopped the program. Even reports that some sales managers are calling asking for the money back because they were denied the rebate when the final paperwork was submitted but their car was already ruined by dumping a solution in the engine. They now have no car. Scary. See: http://excarsalesman.typepad.com/cars/2009/07/the-real-reason-for-cash-for-clunkers-suspension-cash-flow.html
I have a 1999 Chevrolet Suburban 1500 4WD not on the list. They have confirmed this and say they are waiting for the NHSTA to rate it. Its over a week now waiting for the list to change.They tell me in the last email that they confirm the vehicle weight is under 8300GVW, but over 6000 curb weight making it "heavy Duty". I have seen a post that someone was sucessfull in trading their Suburban and Edmunds show curb weight under 6000. Again, where is ther mention of "Curb Weight" now. It's one big joke. I meet the requirements as stated, but not on the list, which is not stated anywhere for the consumer. At their mercy to get around to it.
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