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Well that was quick. The Freep is reporting that CARS will be suspended after only 4 days due to over-subscription. NADA is warning the Wall Street Journal that demand is quickly exceeding the $1 billion available. An unofficial NADA survey shows 25k qualifying deals that the NHTSA still has yet to process. And dealers sound pissed. “Their capacity to accept the applications is not adequate,” one dealer tells the Freep. “Dealers are spending all day trying to submit the applications . . . I have not spoken to one dealer that has received approval, and or has been funded, for even a single transaction.”
Any chance of extension?, maybe with a lower MPG cutoff.
As long as cars improve by 10mpg there will be significant fuel savings.
Damn, that’s a success. July sales figures should look a lot better.
Well this will be interesting. What about all the cars dealers delivered today that didn’t have the paperwork turned in?? Thousands of cars all over the country. WTF
If they do suspend it, they had better honor all deals dated before the suspension, even if the paperwork hasn’t been processed yet, or else there are going to be a lot of very angry dealers and customers calling their congressmen and C4C headquarters.
I suspect Congress will throw more cash at the program if it is really the runaway hit being talked about.
interesting photo tied to the article. i didnt realize just how awful the vw beetle and mirobus mileage was, since you imply they qualify as clunkers. still unsure if my caravan meets the line. some sites say yes, others say no…
We delivered 22 C4C deals in the last 2 days, with 4 more to go. I guess those people will have to wait. Hope the rebates don’t change…
maybe they’ll have better luck with healthcare
Dropping $4500 rebate checks over dealerships by airplane would have been less chaotic.
dwford – Similar situation here. In addition to a ton of clunker deals since the official start of the program, we have been doing them since July 1st. I admit I am worried about the potential loss of income from the deals I thought were already done, and already checked against the Cars.gov rules to make sure they were safe, but I dread the idea of having to call customers who have already been in their new cars for weeks and telling them they have to poney up an extra 3500 – 4500 or bring their new cars back if the government doesn’t make sense of this mess very quickly.
We’ve had two people working full time since Monday doing nothing but scanning and sending the documentation required for the program. We have made sure that we were compliant with all the rules from day one, and have done everything in our power to insure that this goes smoothly. The cars.gov website even says 750 million left for clunkers. If the admiinstration of this program was so piss-poor that they can show that and run otu of money all at the same time, they had better pour some more money in it until it is made right.
Those jerkoffs should have suspended Cash For Clunkers four days ago.
THIS COUNTRY DOESN’T HAVE THE MONEY TO PAY FOR THIS CRAP.
@Dick:
Amen. Where’s my bailout for behaving like a responsible person? For buying a house I could afford during the bubble and not allowing it to fall into foreclosure or disrepair? For contributing to my 401k and IRA? For buying an economical, practical car to begin with?
Congress will give more money for the program for those that have already bought their cars. They just can’t afford not to politically.
Who wants to bet that there will not be a significant improvement in sales numbers for July? I bet anything that it still will be fewer sales than 7/08.
In addition August sales will be even lower since some people might have bought a new car now instead of next month or some time till the end of the year.
I think everyone is missing one of the bigger problems with this plan: its the reimbursements for the dealerships. If the feds can’t shovel the money to the dealers fast enough there will come a point (probably now) where a lot of dealers won’t be able to manage the cash-flow and probably can’t get extended lines of credit to float them until the reimbursement comes from Uncle Sam (er, you and me).
Based on how swimmingly other federal programs such as mortgage modifications, the stimulus package and bank bailouts have gone, I expect much the same for this program.
Who will be liable if i buy a car and the dealer gives me the CARS rebate and later it turns out the program ran out? Is there some contingency clause that protects the costumer (after all, I give up my old car, get a loan… and even if i return the new car, I had my credit affected, hassle, and still need to buy a new car since my old one is gone) or the dealer? i guess if the contingency clause would be phrased so that i the costumer am on the hook I’d rather not buy a new car. Especially considering the dealer puts more markup on because of the CARS.
Dealer on TV was gleeful: Most of the buyers were not in the market in the first place and were drawn in by the C4C.
Raise your hand if you see a problem developing for people buying new cars without a lick of prior financial planning.
I just called the CARS hotline and the lady said they are not out of money, they had over $750M as of this morning. She said there may be a suspension of new submissions so they can determine where they are with the program to date however. Who knows if they have the most up to date info, I was going to be visiting dealers this weekend.
kaleun – It probably differs state to state, but here the sale isn’t final until a bank actually buys the loan. Since most (if not all) dealerships aren’t processing the paperwork through the banks until they have the money from the government, you’ve just been spotted in the new car, it isn’t entirely official yet. Any dealer with a lick of sense won’t destroy the clunker until the payment from the government is in the bank, so, if the money did run out, they would most likely call you back in, give you the option of paying the difference, or some portion of the difference depending if there was profit in the deal and they want to keep it on the road, or giving the car back and taking your clunker back.
NulloModo, that’s wild! Folks are pissed enough at the auto industry and the dealers (and the gov.) that there could be real violence if dealers start canceling deals and returning clunkers. This whole thing is getting crazy.
Nullmodo:
My manager told me today that the Feds won’t approve the sale until they have the disposal paperwork. In other words, destroy the trade, then we will tell you if it qualifies. Are they serious?!
I can’t even imagine dealers not getting paid for cars they took in trade that qualified under CFC, and grenaded the motor on the trade.
Wow – fireworks, they will erupt.
NullModo:
so I drive a new car for some weeks, then give it back… then that car will be worth less because it is used. who pays for that? and the dealer stores my old car till everything is final?
How far are people willing to go for some welfare money….
dwford – I hadn’t heard that part, but I’m not surprised based on the amount of cursing and storming about I’ve seen based on the C4C paperwork requirements. The insurance documents seem to be the easiest to get ahold of, all of the companies we have had to call for proof of one year continuous coverage have been very willing to help. However, lots of people don’t have copies of their registrations, or have lost their titles, and depending on the state replacing a lost title can take anything from a simple visit to the DMV/Tax Collector to filling out tons of forms and waiting a month or more. Also, there are customers who still owe balances on their clunkers, so then you have to add banks getting titles to dealers and whose paying for what before the deal is even approved into the mix.
WildBill and Kaleun – Believe me, dealers are the last ones that ever want to have to unwind deals. Yes, people will be extremely pissed if this happens, and they will more than likely be pissed at the dealer, even though the dealer did everything right according to the government’s slow trickle then sudden flood of somewhat conflicting information. As far as pulling cars back, yes, it can become a PiTA because a car from an unwound deal is still a new car (as it was never titled) but it can have a couple weeks worth of wear and tear on it, plus several hundred miles, which the next customer in line will ask about, and expect to be compensated for, so, obviously, dealers are going to do everything in their power not to have to do that.
The thing that confuses me most about this is that from what I understand, a number of European countries ran cash for clunkers programs fairly sucessfully before the US version started up. Did no one bother to make a call across the pond and ask them how they worked out the logistics?
I guess the European programs didn’t have that much pork in it and were simple. Older than 9 years –> rebate or so.
And the EPA changing their MPG numbers in the middle of the game didn’t help either (of course, they had to revise their numbers right now)
I also assume sales people were promising the moon to potential costumers just to show up. All advertisement I’ve seen only displayed the $ 4,500 and maybe some fine print showed possible limitations.
Amen. Where’s my bailout for behaving like a responsible person?
“Responsible” does not a vibrant economy make. If everyone stopped buying stuff, we are doomed.
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The thing that confuses me most about this is that from what I understand, a number of European countries ran cash for clunkers programs fairly sucessfully before the US version started up. Did no one bother to make a call across the pond and ask them how they worked out the logistics?
It’s a general trend that whenever the US does something, instead of copying others’ best practices, we make up our own worse version because that’s patriotic and all.
Wasn’t it Winston Churchill who said “you can count on the United States to do the right thing, after they’ve exhausted all other possibilities.”
Something tells me a vote-whore will come up with another possibility in the not too distant future.