What is Cash for Clunkers (C.A.R.S.) Doing for YOU?

[Alex Snyder]

I took this photo on the way to work the other morning..what some dealers are doing to get their piece of the Cash for Clunkers pie. I have to admit, it caught my eye. What have you seen? - Jeff

If you're experiencing some good results with the C.A.R.S. Program you're probably excited to have a bunch of cash floating in limbo and a back-lot full of junk!  If you're like us, you're probably still hitting refresh on the CARS-Dealer-Marketing site for a store or two.  Does that make you nervous?

Add to the limbo-state of things some of us may be in, along with the fact that FuelEconomy.gov is changing the combined mileage stats on some cars and some additional rules & forms magically appearing in the dealer portal you've got to be feeling exceptionally great about this program!

We've now taken over 130 clunkers off the streets, at Checkered Flag, so we're enjoying the champagne right now.  After a long meeting about the program processing this morning I'm starting to think the hangover is about to set in though.  We still have some questions about the scrappage value along with some of these new forms we just found.

If you haven't processed a deal yet, it looks like quite a few pages of scanned document uploads and tons of deal information.  We were thinking about hiring a temp to do the processing, but yours truly and our Systems Admin volunteered for the job (shoot me now).

I'm sure it will all straighten out.

Aside from dealing with Uncle Sam on this level for the first time, we've also had some memorable experiences with a few customers.  Before I share any stories, Jeff and I want to hear what you all have been through.  Got some funny stuff?  Some frustrations?  Some bragging?  Let it rip!

Feel free to join our Cash for Clunkers conversation on the Dealer Refresh forums:  http://forum.dealerrefresh.com/f40/cash-clunkers-224.html

 

[philipzelinger]

Jeff,

Every experience that you quoted is already a shared frustration but my real fear is in what is yet to come! The first test calls I had for my dealer clients in several markets with the approved "Scrap yards" were equally chilling as they asked me more questions than they answered! Add to that the simple math that suggests that the one billion dollars funding the program will probably run out "mid-deal" for many dealers with the vehicle delivered and no funds in the till and the nightmare of our first experience with "Governmemt Motors" will be indicative of a concerning future!

There is one positive comment that I should add regarding the site that FordDirect.Com posted for their dealers to walk them through the government process. It is extremely organized and they walk their Ford dealers through the process from registration to printing the rebate certificate so my compliments to them and theirs! All qualified Ford dealers received the site info and access codes so I won't post them here, but if you are a Ford Dealer and you didn't know of or use their site - just ask your DSM or go to FordDirect.Com. After all, what are friends for!

 

[Rob Ernst]

Well, unfortunately, we're closing on July 31st so we're not participating. From the outside looking in, it's VERY frustrating because just about every customer who comes in thinks they have a "clunker" and they get $4500. In a LOT of cases, they just have a poorly maintained POS that, if it were running properly, had all of its sensors hooked up and had been maintained, would be getting 22 - 26 mpg highway and 20 to 22 city. Then they want to argue with you about the fact that "their" car only gets 15 mpg so it IS eligible.

You know the drill, "well, I'm going to go somewhere else where they're not trying to rip me off" syndrome.

Fortunately, I'll be moving to another of our stores (Mike Albert Leasing Retail outlet) where they only sell used cars so I still won't be dealing with C.A.R.S. and have the higher gross of used cars.

 

[Nick]

I run the Internet department for a Hyundai store. We got a HUGE bump because of Hyundai fronting us the cash before the 24th. I think that was a brilliant move on their part.

On the last Monday of the month, I am looking at a personal best month, and a whopping 53%+ of our new car sales have been C.A.R.S. deals!

I find qualifying the customer to be very easy, but then again I am used to lots of ...ahem... time consuming questions about rebates, etc so it's just another hurdle in the Internet process for me. If someone has a clunker, I am on fueleconomy.gov before they finish telling me what it is, and it's a yes or no. Simple as that.

 

[John Savolainen]

I lost a deal on Saturday when the customer wanted to get $4,500 for his '95 Isuzu Rodeo LS 4x4 and buy a 2009 Pontiac G6. His Rodeo rated 15 mpg and the G6 27. On Saturday the gov't website said $3,500 and today it said no classification!
It shouldn't be this complicated. Anyone else experience the same type of situation or can you help me rescue a deal?

 

[Mark]

Alex/Jeff,

In my travels from dealership to dealership Friday through today, I have found that my client Chrysler Dodge Jeep stores were "Run over" by consumers concerning the CARS program. (Chrysler's Ad campaign stating the Doubling of the Gov't Rebate program must of worked in my area.)

From personal conversation with these Chrysler Dodge Jeep dealers/GM's, I have found that they are now waking up to the fact (Monday morning) that they may not see these funds for months. The Hangover is on... Is it true that the "Rules Book" from the government is over 100 pages? Online registration of each and every deal is the only way to acquire these funds? Scary...

How long can these dealers wait on a "Recieveable" of $3500-4500 from the gov't? As a vendor, I felt a lot of frustration out there amongest the GM's/Dealers who are taking part in this program. It's a huge risk on their part. (Present Cash Flow.)

In closing, I want to ditto Phillip Zelinger's first paragraph issues above. Also, if I were Alex, I would not let one CLUNKER leave Checkered Flag's lot until I got paid the rebate from Uncle Sam. By the way, did you take the time to check when that CLUNKER was manufactured? If it was made in June of 1984, it's 25 years old and one month. Does it qualify? Think about it...

 

[Alex Snyder (blog)]

Mark - good advice. If we're reading the 136 page document of rules right, along with the other newly added forms to the website, it seems like you have to report the deal to the government within 7 days of doing it. That also requires a status update on the Clunker along with a "killed-for-resale" title. I'm not sure we can really hold onto these clunkers. But if things go as planned, you get the deal recorded with the NHTSA within 7 days, then they get funding for the clunker to you 10 days later. We'll see how well this works, but the way this thing reads, and past promises, there is a 17 day turn around. We're only 4 days into this program now.

 

[Skip Shakely]

I'm over-joyed and very nervous. As of yesterday we had over 100 plus deals in our 3 stores plus yesterdays business so the program has done what it was suppose to do, "bring customer in", and they are all mostly good qualified customers with a lot of cash deals. I wonder though if the ones coming in are not just a lot of pent up demand were seeing. If we can get them all processed it will make our month. That brings up the concern. It seems like it will be a "dash for the cash" and a lot of dealers will come up short.Since the money is only good for roughly 250,000 car deals nationwide, which comes out to about 12 per dealer with 19,700 dealers. It only stands to reason somebody will lose. We are doing this well and we are not in a large market so what are they doing in large markets? The key in my opinion is the dealers who get the paperwork right and get the deals in to Uncle Sam fast will get the payoff. We have set up Cash 4 Clunker teams in each store to run the process we have set up so that we can get the deals in quickly and correctly to avoid the potential loss that may come, problem is right now we have added $500,000 to an already negative cash flow and it's growing. Plus will the Govt. change the rules? So it's good but scary!

 

[Richard (blog)]

John,

"It shouldn’t be this complicated."? Since when is any government program not complicated?

 

[Brian Pasch]

If you start doing the math, this program will run out of money by mid August. While everyone is trying to get all the legal information and processing forms right, the $1 billion is going fast.

If 18,000 dealers register and each does 10 deals in their first week, that 75% of the money gone. Many of the dealers we have talked to and this forum support this, have a few dozen deals done per store.

The Hyundai dealers have been at this for 3 weeks so they easily have dozens of deals done. One of my clients has 60 deals done and most have 15 done per location.

The NHTSA is supposed to provide a "countdown clock" on the CARS website. This clock will be going from $1 billion to ZERO in not time flat.

Dealers will need to keep an eye on this because this program could go from 100 mph to a dead stop in a few weeks.

It will be a bad case of muscial chairs. Imagine booking a deals just to find out that no more money is left. That will be a happy customer.