NHTSA Rejects 25%+ of Cash for Clunkers Submissions; Dealers Pulling Out of the Program
Just got off the blower with Rae Tyson, stalwart spokesman for the Department of Transportation’s Cash for Clunkers (a.k.a. C.A.R.S.) program. Although Tyson doesn’t have the exact stats, he revealed that the agency has rejected “significantly more” than 25 percent of dealer submissions for government reimbursement. “The bottleneck is regrettable,” Rae said. “But the number represents safeguards against fraud.” The clock is ticking. As of this morning, US car dealers have submitted paperwork to the C4C program for 390,283 vehicles. That represents $1.63 billion from the $3 billion total. Minus the $50 million processing fee. So there’s $1.34 billion and change left in the kitty. [Top ten reasons for C.A.R.S. rejection after the jump.] Meanwhile, NADA spokesman Chuck Cyrill says, “a lot of dealers are pulling out of the program.” Cyrill contends that cash flow problems caused by paperwork issues are causing dealers to “limit their exposure.” The remedy is the experience. “To address dealer concerns with a backlog of reimbursement claims, DOT has informed NADA that it will commit to deploy an additional 1,000 employees to speed up its processing efforts.”
10. Missing trade-in registration
9. Trade-in not registered to same owner for required 12 months
8. VIN mismatch on summary of sale
7. VIN mismatch on trade-in proof of insurance
6. Missing summary of sale/lease
5. Trade-in VIN mismatch
4. Missing signature on summary of sale
3. No proof of insurance
2. More than three errors in the transaction
1. Failure to brand title “Junk Automobile, CARS.gov.”
More by Robert Farago
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@Steven Lang so if the dealership hasn't registered my new car yet, can they withhold that in an effort to get me to reimburse them?
Could this stupid 'Cash for Clunkers' program be any more f**ked up? Just kill it, already. The only people who actually like this program are dealerships who get a temporary free rape pass (over admittedly idiotic consumers, who are paying MSRP for cars that were selling for 15% to 25% off MSRP just a few months ago). Manufacturers and dealers will resume the hood on the cash piling on when the CFC program ends. Until then, no person with a brain should step foot on a dealership lot. Of course, all the people who sell new cars or depend on the sale of new cars will tell a different tale (i.e. This program is great for the consumer!).
ohsnapback: "...consumers, who are paying MSRP for cars that were selling for 15% to 25% off MSRP just a few months ago). Manufacturers and dealers will resume the hood on the cash piling on when the CFC program ends." I hope so. The early birds got some terrific deals, such as $3,500 or $4,500 government subsidies on a near-worthless clunker PLUS $3,000 or so factory incentives on '09 models (such as Sonatas and Fusions). Now, the sensible '09 models are sold out, factory incentives on 2010's are modest if anything, and dealers are selling at full sticker. Some CARS customers are getting new rides for about the same net cost they would have paid pre-CARS.
"“To address dealer concerns with a backlog of reimbursement claims, DOT has informed NADA that it will commit to deploy an additional 1,000 employees to speed up its processing efforts.” Ye gods, an additional thousand employees! How many (or should I say, how few) claims does an employee process per day? Not enough, apparently." Next question: what were those thousand employees doing before getting deployed to push c4c paper? What other ongoing DOT programs will now fall by the wayside for lack of paper pushers? Come to think of it, some of those DOT programs are probably giving federal gasoline tax money to pay for urban transit systems. Hmmm, maybe this is a good thing...?