Cash for Clunkers Zombie Watch 1: All the Latest News

Robert Farago
by Robert Farago

Just kidding. No zombie watch for the Cash for Clunkers (a.k.a. C.A.R.S.) program, even though it’s already burned through one life and two dealer deadlines. Automotive News [AN, sub] reports that Uncle Sam’s extended the dealer deadline again, thanks to ongoing computer problems. Transportation spokeswoman Jill Zuckman “didn’t specify a particular time for the deadline, and said it depended on how long it would take the government to get the clunkers Web site up so that dealers could file claims.” While the boffins sort that out, more “issues” are arising. As of early Monday morning, dealers submitted 635,186 claims worth $2.65 billion in rebates. Although AN says the number puts the payout “close” to the $3 billion limit, C.A.R.S. may already be over budget. Add up the administrative costs and the rebate requests “stuck” in the system, and the question arises: what happens to those deals that may arrive once in a lifetime, after the money’s gone? Meanwhile, a group of dealers is keeping its “shadow” Cash for Clunkers plan going . . .

We’ve already highlighted some of the scammers who misled dealers and customers into believing that they were “official” (i.e., governmental) Cash for Clunkers representatives. It turns out the same guy who got his hands rapped by the feds for adopting a federal mien found the motherlode with autostimulusplan.comLevel 5 marketing‘s Sean Wolfington has convinced some major dealer groups to dress up their normal trade-in come-ons as part of Cash for Clunkers. I mean, the “2009 Automotive Stimulus Plan.”

Automotive News is happy to promote report on the private program without reservations, and the site goes out of its way to say it’s not associated with the government program. But it’s clear that it’s the same old dealer policies with a new name. Wolfington’s plan covers both new and used cars, with few to none of those pesky caveats that restricted C4C.

The dealer program has fewer restrictions than the government plan. For example, it allows shorter leases than the 60-month minimum required by the clunkers plan. There is no limit on the price of a new vehicle; the government program set a $45,000 cap.

The dealers require that the vehicle being traded:

• Is older than the 2006 model year.

• Is in working condition.

• Has been owned and registered for at least six months.

There are no minimum miles-per-gallon requirements. The replacement vehicle must have a minimum improvement of 2 mpg.

And if not, “the dealers say their plan may vary in some states because of laws governing automotive advertising and promotions.” Or any other reason, really, as it’s not a government program. And there’s no “fraud squad” monitoring its implementation.

Mr. Wolfington claims 73 dealers have signed-up for his auto stimulus plan, including Rick Case Automotive Group’s sixteen dealerships in Ohio, Georgia and Florida. Be that as it may, the success of Wolfington’s program highlights the fact that C4C provided a shot in the arm for all car sales; which August’s sales numbers will prove. But the pull-forward, and resulting crash, may be equally epic.

Robert Farago
Robert Farago

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  • Christy Garwood Christy Garwood on Aug 25, 2009

    In my opinion, based on a very informal and not statistical in any way, survey I did of my fellow GM workers, sales have been subdued or pushed back while everyone waits to see if they are going to be laid off. And I don't know about pulled ahead either... some times I wonder if the price of a new vehicle is just too much. What would the SAAR be if all cars/ trucks were priced $3K-5K less to match the stagnation in real wages in the last eight years?

  • Kgriff1118 Kgriff1118 on Aug 25, 2009

    No cars are being destroyed by dealers until the reimbursements come through. No dealer would be stupid enough to be left holding a worthless car based on pending government payment. C4C law allowed dealers to store the cars until payment was finalized without being destroyed. Keith Griffin UsedCars.About.Com

  • The Oracle Going to see a lot of corporations migrating out of Delaware as the state of incorporation. Musk sets trends, he doesn’t follow them.
  • Foo Eh. Net present value is in the red, once you add in rapidly rising insurance, late by months basic repairs-and-no availability, battery replacement, future hazmat recycling fees, and even faster depreciation. Wait until litigants win for "too heavy" in accidents... The math is brutal but if you value virtue signalling, some will pay anything.
  • Lynchenstein @EBFlex - All ICEs are zero-emission until you start them up. Except my mom's old 95 Accord, that used to emit oil onto the ground quite a lot.
  • Charles The UAW makes me the opposite of patriotic
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