The National Auto Dealer’s Association is warning its members that a government audit of the $3b CARS program is imminent. “We expect that a high percentage of dealers will be audited,” NADA explains in a letter reported in Automotive News [sub]. “Please make sure that all transaction paperwork and trade-in vehicles are in order.” Widespread fraud has been reported in the German clunker rebate program, particularly in regards to vehicle disposal. Or, rather, the lack thereof. Apparently pretending to destroy a vehicle and then driving it to Poland (Mexico in our case) for sale on the black market is is not an approved disposal method. Anyway, investigating fraud seems like the prudent thing to do after spending $3b in a few short weeks, but try telling the dealers that.
Dealers are not happy with the investigations (which seem to have started in Wisconsin and Virginia) for one simple reason: they haven’t been paid yet. On the other hand, if fraud is an issue it makes sense to do a little diligence first, and then pay off dealers (most of whom are being fronted clunker cash by their OEM). But because the CARS rules require the government to reimburse dealers within ten days of approving a qualifying deal, the dealerships are getting nasty. “The government expects dealers to have every ‘i’ dotted and every ‘t’ crossed, and yet it violates its own law,” say NADA officials.
Any bets on the number of fraud cases uncovered?
I wonder if the audits were started because dealers were complaining? No, nothing like that would happen, would it?
There’s no reason to be PC, so I won’t, as being PC is frowned on by TTAC anyways (a virtue of this site);
Dealers are scum, for the most part (yes, yes, exceptions exist – which proves the generality).
I wouldn’t be surprised if some dealers get snagged for “creatively circumventing” the rules.
But I’d be surprised if that % is very high, as dealers are clever scum, and certainly had to have known this was coming.
I, for one, find it outrageous that our hardworking and trustworthy car dealers should have to provide proof of anything. We should just take their word for it, since no car dealer has ever lied.
The gov’t should keep their part of the bargain; after all, they started this mess.
Just don’t spend too much money investigating and prosecuting dealers – when you make a deal with the devil, you should expect to be bamboozled (or is that Beelzebubed?)
How much you want to bet that whatever investigations have been started were triggered by whistle blowing tipsters? But then again, there is the potential for dealer A to make dealer B’s life difficult by making unfounded accusations against the competitor.
Dealers using underhanded tactics or outright fraud to make a buck? I’m shocked that anyone would even consider that possibility. We all know that paint protection packages are well worth the $200 and up price and that it really should cost $400 or more to do the factory recommended 30k mile maintenance interval.
John Horner,
You are probably correct. I’d venture well over 80% of the investigations are triggered by dealers ratting on their competitors.
Knowing that it happened? 50%
Being able to prove it? <25%
Being able to prove it? 25%
+1. And hell, given the moral obtuseness of the CFC program, there’s probably a substantial minority that couldn’t care less if a dealer re-sold a serviceable clunker or ten.
Especially if the scrapped clunkers with their “nuked” engines made it to Mexico as “parts”. Northern Mexico is know for reworking and reselling discarded Yankee automotive iron.
A) The reallity of the C4C program was an attempt to boost new car sales. Wasting millons of $$$ to find dealers who didn’t properly destroy the clunkers seems like a mighty big waste of money for the sole purpose of keeping up appearances.
B) What is more environmentally correct (EC?)? Destroying cars that run and probably run much better than most of the metal that is on the roads south of our quasi-border or allowing those cars for which there is still a demand to displace even worse clunkers that are held together with bailing wire and generic duct tape (the real stuff costs too much)? The green washing of the C4C program is much more offensive to me than dealers trying to circumvent it.
Now if they are goin after dealers who are manufacturing sales, changing sale dates, or other obfuscations to shoehorn deals into the C4C program, then have at it.
I suspect that this was one of the main reasons for the many YouTube videos of engines being given the death treatment.
A TTAC article stated that the German program allowed salvage for parts. Wouldn’t surprise if the parts were reassembled in E EU.
The illegal alien I worked alongside in California (at a salvage yard.. aka auto dismantling facility) went back to Mexico for a few months yearly. Each return trip was in a used car for resale at a big profit in Mexico.
His preferred vehicle was a full-size Ford several years old. He drooled over the old LTDs of the mid 1970s with the next drooler the smaller versions of the later 1970s.
He stated that in his part of Mexico Fords were numero uno while a couple hundred miles away Chevys or Buicks would reign supreme. Funny how in the old days there were regional brand favorites here in the USA and elsewhere.
This was back in the late 1980s.
Never informed the authorities about his illegality since doing that was a waste of time. Even illegals apprehended for fairly serious crimes were released on their own recognizance. Any surprise that none showed up for their court hearing?
Even the guy caught grabbing and groping my friend’s 12-yer-old daughter on her way to school was released but failed to show up for court!!!
Anyway, I asked about the return trip and if any goods were brought in this direction.
He laughed and said sure, but don’t expect any pinatas and the return is a little slower than the departure.
He had all the ID one could want… hot off the backroom presses in Los Angeles and environs.
His favorite money maker was the IRS.
Huh???
Phony ID, replaced yearly. Claim 9 dependents. Stop at the wage that maximizes Earned Income Credit.. payable even with no income tax taken from the pay due to the claimed 9 dependents… then work off the books the rest of the year OR…
grab a new phony ID set and repeat the scam.
Around $4,500 or so for EIC. Double that if the scam is pulled twice yearly.
What a racket!!!!!
The 100 percent duty on imported vehicles into Mexico was bypassed due to our “immigrant” brethren claiming upon Mexico entry the car was for personal use. Once in Mexico’s interior it was easy to sell at much more than what he paid for it.
Nice guy, though. Obeyed most of our laws and never bothered anybody, unlike the many with their gang-banging and relentless violence and committing violent crimes against USA citizens.
Once in Mexico’s interior it was easy to sell at much more than what he paid for it. obbop
He wasn’t that bright. He could have reduced his overhead to zero by stealing the car!