It seems to me that the Government is cherry picking the deals to see if they can reject them, they are skipping around in the most random of orders, there is no method to how they look at them, probably closing their eyes and pulling a number out a barrell, out of 85 total deals I have been paid on 7, however they reject 2 - 3 daily, and believe me I have had to call them( the government) to inform them that they made the mistake, not us on a number of occasions in regards ot rejections. It seems like they cherry-pick the rejections and leave the approvals to just a handful of people, its probably easier for them to kick it back instead of filing the paperwork to approve it and then when it gets rejected it probably goes back in the pool for some other poor guy to look at and do all the paperwork. Out of 10 rejections, only 4 of mine have been valid, after I finally get them on the phone and make them go over it with me, they say stupid crap like "you should have circled the dates for them to see" , this is crazy and my GM gets every rejection email and he thinks we're a bunch of douche bags shortcutting on the paperwork lol

@ Ann, no problem. Our business is extremely cash intensive. Most dealerships in the US finance their inventory with a bank (either an independent bank like Wachovia, Bank of America, etc or a manufacturer's captive finance source like Ford Credit or Honda Motor Credit). The bank requires payment in full from the dealer when the vehicle is sold by a certain period of time. If this does not happen, the dealer can lose its source of inventory financing and could have to close its doors. Furthermore, the dealer is subject to spot checks by the bank and if the car isn't present most banks require the dealer to pay it in full irregardless if the dealer has received full payment for the vehicle. Here's an example: $10,000 car - $4500 rebate means customer pays $5500 for vehicle. However, the dealer has to pay the bank $10,000 for the vehicle so from a cashflow standpoint the dealership has now gone backwards $4500. This happens every day with manufacturer rebates. However, those rebates have a very simple claiming process with a defined payment schedule. This isn't the case with the CARS rebates. One claim might not seem like alot of a drain but taken with 50 or 100 others and this can create a serious cashflow problem. At our stores we complied with the guidelines set by NHTSA and delivered the vehicles at the time of sale and took the clunker from the customer. Fortunately for us we have sufficient capital to do so and can wait for the government to pay us for our CARS rebate. It sounds like the place where you are conducting business saw that their exposure on the CARS program was such that they were uncomfortable with releasing more cars without receiving payment from the government and thereby having to pay the vehicles off with their finance source and having negative cash flow. This predicament placed them in an uncomfortable position between alienating customers by asking them to wait or risk further cash drain by releasing vehicles that they don't know when or if they will receive full payment for.

Thank you. I had been told by the Sales Manager that information from a conference call with the NHTSA noted that 150 vouchers a day were being processed. That seems too ridiculously small an amount for what is now a 2000 person effort to handle the paperwork. Just having information that is valid would be helpful.

Would you mind helping me understand how a customer paying for all but $4500 of the vehicle cost does or does not make any difference to a dealer?

My situation includes the dealer not wanting to see us with our clunker or our payment, beyond the deposit, until the deal is approved.

@ Ann, the government will release data pertaining to nationwide claim submissions and payment. For the deals that we have done under the CARS program, we haven't been able to figure out a pattern or find any type of cadence as to which claims are selected and when our claims will be paid. I think this is because of the sheer volume of claims that NHTSA and their contract employees are processing throughout the US. Initially it was a nightmare to submit claims because of site failures (crashes) and problems with the information that the government had (referenced in my post about not sharing the EPA's vehicle database). Many will sit in a pending status for quite some time and then are rejected for a clerical error or a document that didn't scan properly. We cannot edit the claim until it is rejected even if we know we made an error in submitting it so the claim will then take a much longer time to get paid. Ultimately, unlike a manufacturer rebate which has a predictable timing from submission to payment, the government rebate submission to payment schedule is unclear and is why customers like you are having difficulties completing your transactions.

@ Ann, I would contact the General Manager of that particular store and let him or her know you intend to contact NHTSA (at the 800 number on the cars.gov site) and let them know about the problem your facing. Contacting the manufacturer is pointless as each dealer is independtly owned and operated. The fines that are out there for not complying with the program exceed what the value of the rebate is, so s/he (the GM) has an incentive to try to make things work without involving the government. Although the dealership has the right to ask you to sign an agreement at the time of purchase to repay the government rebate if they do not receive payment from the government (not sure if they can ask you to sign this after you agree to the deal and have signed all of your paperwork already)and you have the right to refuse to sign it and therefore not do busines with them, they cannot hold the vehicle pending payment from the government or refuse to take your clunker at the time you consumate your transaction (sign the paperwork). If they have your title as you said they do and you cancel the deal, you may have recouse if they have already wrote on the title noting it as a clunker (a requirement for claim submission). In doing so they would make your vehicle have a 'junk' title thus dramatically reducing the value of your vehicle. I'm sorry that you're having these difficulties and I hope the store you're working with can resolve this issue quickly for you.

Charles- are you able to determine or have heard of how many claims per day are being decided as approved or at the very least processed?

@ Chris, I work for a multifranchise dealer in VA. The 'front end' of the program was a phenominal success(i.e. stimulating customer demand and sales). The folks that purchased from us were individuals who rarely buy new vehicles and keep the ones they have forever so I don't think this program necessarily pulled ahead customers from the upcoming months. Their vehicles were truly clunkers and I couldn't have given them a trade in value anywhere near what the government offered. Virtually all had outstanding credit and most paid cash for their new vehicles. The 'back end' of the program (i.e. claim submission and claim payment) has been challenging to say the least and has been the focus of extensive reporting through various news sources. The demand on our personnel and the time that it takes to submit a claim is unacceptable. The lack of integration between the EPA's database and NHTSA's database pertaining to vehicles built is also unacceptable and created major headaches with claim submission. I believe the government had the wrong department (NHTSA) administering this program as it is miniscule in size and lacked any experience and infrastructure with processing payments. These factors have lead to the existence of a 'claim purgatory' that claims live in for weeks on end, neither rejected nor paid. We believe that eventually our stores will be paid for all of our eligible claims and would participate in the program again as long as our theory holds true and the government can streamline the claim submission and payment process.

I seems this program has really become a mess. I am curious, to the dealers out there – if this program were to be offered again, would you participate or avoid all together? Is all of this mess worth the extra sales? In other words, has the “gift horse” that government has handed out to you too (I assume Net Sales for most dealerships benifited greatly, although I do not have any data to back that up at my fingertips), to the dealers become a “white elephant”? Or is it too early to tell (as in you do not know if the government will actually pony up what they may owe you)?

Jon- Your analogy is okay for personal transactions- one can make a choice to participate in loaning money out to a friend or not. This is a business situation in which rules and laws are involved. The choice of the dealership was to be involved or not in the program. When the dealership opted to participate they were agreeing to abide by the rules. There appears to be dealerships playing by the rules and dealerships which are not. I can understand that the dealers who submitted things that are valid and done in a timely manner are rightfully frustrated. I almost have that situation except that the dealership is not in total compliance by not accepting to physically take my clunker and coming up with a "you pay me if this isn't approved" agreement weeks after the deal was signed. I wouldn't choose to have a friend who acts that way. Yup, the government is definitely harming the entire process by their own noncompliance of what they stated would happen regarding approval and payment. One could feel pretty "friendless" in this crowd.

If the car is paid to the dealer with the exception of the government voucher doesn't that help their cash flow?

When manufacturers like Toyota offer (I believe this was made available August 17)to front the dealers the voucher differences, why don't dealers take that on and participate in an opportunity to develop good will with potential repeat customers?

What everyone seems to be forgetting is that this is not a dealer or consumer issue, all the problems start and end with the government. If dealers had received payments within the 10 day time frame they had been told, every single vehicle would be in the possession of the consumer. Unfortunately many dealers are out thirty days on their submissions and still have no money to show for it.

Now let's put this in a context everyone can understand, let's say a good friend approaches you and says they need to borrow 30% of your paycheck from you, but they assure you they will have the money back to you within 10 days. Now 10 days have passed, no money, 20 days, no money, 30 days, no money. Now you are short on covering your expenses and another person comes and tells you they also would like to borrow money from you, do you think there is a chance you are going to take steps to cover yourself this time? It's no different than what the dealers are doing by asking the consumers to cover the shortfall if the government doesn't pay out.

I think the reason so many consumers are upset about being asked to cover the $4,500 is that they think there is a good chance the government won't come through with the money. Think about it, if it is a for sure thing, why would anybody be concerned that the $4,500 note might come due? So in reality both side have the same exact fears, that the government will end up not paying out.

Thanks Kim. I have been talking with the Sales Manager. He is the one that provided the info regarding signing an agreement to return the car or pay $4500 if the deal is not approved by the CARS program. Our clunker qualifies in every way so that aspect shouldn't be in question. I am thinking I will call the NHTSA on Monday, and also look to talk to the manufacturer. This dealership is part of some large "group" over several states-I don't know if you get more or no better attention if you go up that type of ladder. I guess I will talk to the AG office again on Monday. I have the same fear as some others that this might threaten the deal altogether...can a dealer cancel a deal that is already submitted when I want to comply but they are choosing not to?

Ann,
I a so sorry for your situation. Our situation came to a head when my husband looked at me and said "When does our warranty start? I looked u our manufacturers Customer service number and after talking to the found out it had started on July 31. My husband visited the dealership and at first things did not go well. He asked about when we could get our car and was told to pay the 4500 and we could have it today. He told them that was against the guidelines. The man walked away from him. He was able to talk to our salesman and told him he wanted to speak to the sales manager and was taken right to him. Unbeknown to us the manufacture had called the dealership. A date and time was set up right then. The women I talked to from the manufacture calle dus this afternoon and let us know our car would be released I was able to tell her yes on Monday at 3:30. She is going to call us Tuesday to make sure there were not problems. Hope this helps.

We are in a similar position to Steve and Kim- it has been 27 days since we signed for the new car. Our dealership is 3 hours away so it isn't convenient to run down there. We expected to take our clunker to sign for the new car, we haven't had a new car in 11 years so we have been socking away the cash for when we "had to" get a new car. This program was the incentive to get out the checkbook. You can have cash in hand if you save it over a long time. The salesperson told us to bring all the paperwork but not bring the clunker. I have since learned that we were supposed to leave the clunker but the dealership seems to have no interest in taking it. They also will not release the car to us unless we sign an agreement to return it if our voucher is not approved. This is a new contingency they have come up with as of August 13-about 2 weeks after we signed all the CARS program paperwork and agreed to buy the car. The advice they have from their lawyers is that if the customer refuses to sign, the dealer can choose not to deal. It seems like a threat. I am confused as to how that applies to a deal already entered into. We have a downpayment on the car, they didn't require full payment on our part. Per the Sales Manager our "invoice" shows pending approval. It has been 28 days. I spoke with the state dealership association, they "guessed" the dealer didn't want the clunker yet because of space issues but didn't really know. I also was told that the dealer's association for this state advises their dealers to not release the cars. I have spoken with the consumer arm of my state attorney general's office and they are confused as to what is right. They have read the CARS.gov site info and agree the dealer's stance is in conflict with what is stated about delivery of a car and taking possession of the clunker. There doesn't seem to be anyone or entity that has the interest in pursuing compliance by a dealer. I don't feel comfortable having this clunker with me- the title has been signed over. It's a 3 hour ride over a weekend (no government agency answering the phones on the weekend). If I show up with the clunker and they don't want to take it-it is a big deal. If I show up with a clunker and they still won't release the new car then I must drive up two cars if I have to insist on leaving the clunker behind. It's a mess.

Advice?

@ Chris, you are 100% correct. The market does indeed determine the supply/demand equilibruim of goods offered for sale by sellers and prices buyers are willing to pay. I think what the OP was trying to point out that with the large amount of retail pricing support provided by the US government and depending on the manufacturer the large amount of support in the form of factory rebates, this supply/demand equilibrium is being reached without much discounting from the dealer, if any at all.

To the post above that states “we’re selling more cars at full sticker, because that’s what they are worth.” While I appreciate that you would like that to be the case (and sometimes it may be), what an item is “worth” is dictated by what a buyer and seller agree on and transact. More often this is readily apparent in the used car market. I have an 06 Lotus Elise, pristine condition with about 12K miles, that I was considering selling. In talking to many other Lotus owners they seemed to believe that my car was “worth” around $36K (sticker was 51). THEN..when looking at comments on various forums, people who did not own one but were talking about buying one thought they were “worth” the high 20K’s. Of course, many could site an e-bay sale etc to support their argument. The reality is somewhere in between. Neither the Buyer nor Seller sets what an item is worth. The merely suggest their opinion by means of an offer to buy or sell. I suppose the best indicator of a new cars worth would be historical prices paid within a specific geography. What I have seen is that sticker price seems to have been often quite a bit higher than what the Market has decided in terms of “worth”. Now, if we are talking some F-Cars that sell over sticker…

I THOUGHT THAT THE DEALS WERE REVIEWED AS FIRST IN, FIRST OUT. I HAVE DEALS BEING REVIEWED THAT WERE INVOICED AT LEAST TWO WEEKS AFTER SOME THAT HAVE NOT BEEN REVIEWED. SHOULD I BE CONCERNED ABOUT THIS?

Thanks Steve for the info.
My husband just got back form the dealership and after a lot of talking and finally meeting with one of the owners our car is scheduled for pick up Monday at 3:30.

Kim, I was in your same position with not receiving my new car and still driving my clunker. I also finished my deal on July 31st. I emailed the GM of the dealership yesterday as my sales rep was steadfast in not giving me my vehicle. I mentioned to the GM the date my deal was done, as well as my rights under the program (having my car the day of the deal), and the dealerships violations under the program (not accepting my trade in). I also mentioned that the CARS hotline people and the NHTSA rep. I talked to both agreed that I should have my new car and asked me to report the dealership ; they also mentioned the dealership could face fines as a result. In any case, the GM emailed me back, and we set up a time to take delivery and hand over my trade-in..I should have the car later today. My advice - move up the ladder and talk to someone other than your sales rep.

I bought a car under the cash for clunkers program on July 31, and am still waiting for delivery. I have been very understanding of the dealerships position but just was told my warranty started on July 31. I have now lost one month of coverage and there seems to be no end is sight. What are my options?

$50 scrap value is all we gave our customers. We delivered all sold vehicles under the CARS program as told, the same day, or when we got it in on trade from another dealer. The junker picked up every clunker within 24 hours. What they make on the clunker is irrelevant to us and our customers. The $3500 or $4500 in CARS rebate was given to the customers by our dealership. We are still waiting for the Government to pay us about $300,000 which we should be paid with interest. The Obama administration lied about the payout to dealers and if this program ever comes back, one of the biggest Nissan dealers in America will say - sorry, we don't participate. The $300K we're owed is hurting. The customers need to thank the dealership if any thanks is possible from a trend in car buyers that think they're owed something. Just another reason we're selling more cars at full sticker, because that's what they are worth.

wow. ya'll actually got people on the phone at the number? i never actually heard a voice except for the new recording of a different voice telling me to push another number on the menu.. then i would hold for about 2 hours and then it would cut me off. i wasn't able to submit my actual paperwork until midnight. i wasted at least a weeks worth of time submitting paperwork only to get kicked out and not able to log back in.. then i would have to resubmit it all over again..it only worked for me about 11pm each night. today, i finally was able to logon this afternoon to check the status and they are still under review. i tried logging on this morning and their server down. go figure.

Steve, Please see a couple of posts above.

err

Anyone know the deal with the scrap value? Does the dealership get a scap value for the "clunker" when they take possession of the trade-in, when they disable it, or do they do that before all the paperwork is in? I have a feeling my dealership didn't do this properly and only put $50 for the actual scrap value to cover a certain fee b/c they didn't want to worry about giving more money back to the consumer...

thanks... at least i know it's not something i'm doing wrong...