Cash for Clunkers - Does it Work for You?

paul007

The dealers are suppose to get paid in ten days. It's currently an overloaded system and the government has said that they WILL get paid in full. I'll tell you this much. I was in the commercial construction business for a long time as owner. I never saw a contract that was net 10 days. It was always 30-45 days net and even then a good many payments were a few days later. Many of these contracts were over $200,000. I didn't like waiting, but the business owner is always the last to get paid. I didn't complain because I had guarantees that I would be compensated as long as everything was done per the contract. In the meantime all employees got their weekly paycheck, union dues were paid, insurance was paid, fuel was paid, etc. If I needed to I dipped into our line of credit. The interest paid was a part of doing business. At no time did I say that I wish that I had not participated in a project. The big picture was that we were all working and we were making money, lots of money.

As for the dealers who are complaining, ask them how they would feel if they saw their competition with 50 cars in their lot with "SOLD" signs on them and he had a lot full of cars with no "SOLD" signs on them. One guy has money in the pipeline and the other has nothing.

The dealers are looking for instantaneous payments like they get from a buyer holding a certified check. That's not how it works when selling to the government. They'll get paid, but it takes a bit longer. If they don't like it then they get out the program and just look at their lot full of unsold cars every day for which they're paying a fee to have them sitting there.

exb0

I understand your frustration. However, you have to understand that they put up a web site for dealers, a web site for consumers and an app to accept your claim in 30 days. That's simply amazing. I surprised it works at all.

I have been doing software for over 20 years, last 12 for the government, I have never seen anything go live in 30 days. Usually it takes that long to gather requirements and determine what the schedule is.

stephen987

I didn't complain because I had guarantees that I would be compensated as long as everything was done per the contract.

But with this program there are a lot of unanswered questions regarding eligibility (salvage titles, for example). So some dealers are uncertain that they will be paid at all.

94gs

I have been doing software for over 20 years, last 12 for the government, I have never seen anything go live in 30 days. Usually it takes that long to gather requirements and determine what the schedule is.

My guess is that the planning was done much earlier than July 1st. The implementation (well tested) must be done before July 24th. Most of the technologies involved are well known. The most difficult part is to make the system scalable (e.g., processing 10K transactions will take at most 10 times (not exponentially) harder than processing 1K transactions).

paul007

If with the new funding 700,000 gas guzzling clunkers come off the road then that will be 700,000 less vehicles that will need either new or used parts specifically for those vehicles. Inventories were based on those vehicles being around for a while longer, but the clunker program has thrown a monkey wrench into those estimates. If the parts potential need has been significantly reduced for those vehicles due to their demise (crushing) then somebody is going to left holding the bag for a lot of new and used parts for those vehicles. There a lot of unsold buggy whips and horse harnesses when the family transportation market switched to cars.

chunglau

But with this program there are a lot of unanswered questions regarding eligibility (salvage titles, for example).

What is unanswered about this? The rules and the law do not state salvage titles not being eligible. They clearly spell out the eligibility rules. People have called the government agency and got confirmation. What more do you need? It's only on forums like this that you find people repeating misinformation. Can you provide any indication from the rules or the law that salvage titles are not eligible?

mercy305

It doesn't make any sense to me to require your trade in to be drivable when they are going to destroy it anyways. They should let you tow it in. Also, who cares if you had insurance and registration continuously for a year up to the day that you are doing the trade in. I understand they don't want people buying a car & then trying to do this program, but I think they should only require you to have owned it for a year and provide the proof. Who cares if it was insured or registered. In my state (Florida), you don't have to be insured as long as you are not registered, which means you don't have a tag. It is not required to be registered as long as you don't drive your car. This program eliminates a lot of people. Maybe these limits are b/c the gov't wants to limit how much money they give, but what do they care, they spend $ on other unnessary stupid things anyways. Obama & the democrats just want to try to look good for putting this program out there to make it look to people that they are trying to help them get a new car, to the banks & auto industry that they are trying to help them get more business, but it's really not that much help. Just like the morgage "help" thing. From what I hear, it also disqualified a lot of people. It just made Obama look good that he put out some "help". ALSO, I think they should have made this program for FORD, CHEVY, and all American cars ONLY. Not the japanese cars which were doing better anyways. Or maybe an extra incentive where you get more for buying American and/or hybrid. Just like other bills, they didn't spend much time on it & just threw it out there. Some cars don't qualify even if you have the 4 or more MPG difference. I don't understand that either.

gagrice

They clearly spell out the eligibility rules.

Not exactly. They state you have to have owned, registered and insured for the previous year. Some have been rejected because the name on the title did not match the name on the insurance exactly. I have a title from CA in front of me. It includes my middle name. I have my Farmers insurance copy which does not include my middle name or initial. That could be rejected. So the dealer takes my clunker, title, registration and insurance in good faith. His mechanic destroys my engine which has to be done before they submit the paper work. Sam kicks it back because the name does not match without a middle name on the insurance. Where does that leave the dealer that has just handed me the keys to a new vehicle and destroyed my clunker?

mercy305

Wow, interesting analogy. I agree completely. This program was not thought out by congress. Like other bills, just put it out there without much thought. There will be less demand for new & used parts for these destroyed cars and that could affect businesses that provide that. I would think it would also drive up prices for used cars, since there aren't as many competitor cars out there. That doesn't help the consumer in these times. Read my post # 1079. In my post I'm just pointing out that it doesn't help many people, so what's the point. They either go all out with the program or just not do it, b/c it will probably cause more damage than good so they might as well help more people get the cars. Personally, I don't think they should have come out with it in the first place. More money owed to pay back & for what. Does not help many & will cause problems such as mentioned above.

bobalston9

Anyone know how my dealer could not have submitted the Summary of Sale/Lease and Certifications Form" shown on p121 of the CARS web site rules without my signature?

I also never saw the CARS Purchaser Survey but since it is not signed by the consumer, it would be easy for the dealer to "handle".

Three days after our deal, the salesman called urgent to have us sign some documents. One was the document which stated the estimated salvage value, which they are required to disclose to buyers. They had not previously done that.

He also presented a new document, stating that it was required by the State of Texas, that would add conditions that if the dealership did not receive the CARS money, we would be on the hook for the amount. we declined to sign.

Bob

jeffyscott

Some of those who voted for the bill wanted to get a few gas guzzlers off the road, that is the reason for the requirement that it be drivable, etc. Politics involves compromises amongst people with differing ideas, not the application of Vulcan logic.

What would be the point of giving you money for towing in a pile of junk that is not even running?

tidester

not the application of Vulcan logic.

Vulcan logic would dictate knowing the intent of the legislation before criticizing the implementation. \\//_

tidester, host
SUVs and Smart Shopper

fezo

I had a very tempting offer from a car sales friend. He got an old Winstall in on the C4C. He thought I'd enjoy watching them kill the engine. I'd have liked that but he's a few hours away.

I did tell him that on most Windstalls the engines kill themselves with no help needed.

joel0622

I have not talked to a dealer yet who has recieved any money. I am yet to find one with an approved transaction

dubforclunker

Need some advice

So I got this 1997 Mitsubishi Diamante Sedan which I went to www.cashforclunkersheadquarters.com and it said my combined MPG is “18.” Went to a Honda dealer today and traded it in for a brand new 2009 Honda FIT. The deal we agreed on was as follow:

$17,500 includes dealer destination fee
$100 clear mask (from $299 retail)
($4500) cash for clunker rebate
$1,400 Tax
$14,550 final price for which I wrote a check and credit card for the full amount

Everything paid for out the door without financing. Signed all the paper work, waiver form, etc... As I was driving home, the Honda manager called me and said he went to www.fueleconomy.gov and said my car is actually 19 MPG for which it does not qualified for the Cash for Clunker program. He wanted me to bring the car back to the parking lot and discuss further.

Here is my thing, I wasted all day negotiating the deal and he wants me to bring the car back because now he can’t do the deal? What legal avenue does this dealer have against me if I don’t bring the car back? As far as I’m concern the deal is done and if it was the other way around and I wanted to return the car after I drove off the lot, would he be so kind as to give me a full refund?

Any advice would help and greatly appreciate it. Thanks.

smithed

Need some advice
Everything paid for out the door without financing. Signed all the paper work, waiver form, etc... As I was driving home, the Honda manager called me and said he went to www.fueleconomy.gov and said my car is actually 19 MPG for which it does not qualified for the Cash for Clunker program. He wanted me to bring the car back to the parking lot and discuss further.

Here is my thing. What legal avenue does this dealer have against me if I don’t bring the car back? As far as I’m concern the deal is done and if it was the other way around and I wanted to return the car after I drove off the lot, would he be so kind as to give me a full refund?

Any advice would help and greatly appreciate it. Thanks.
^^^^^^^^^^^^^
I think you will find in the print of your contract that you do not own the car at this time. Unless you have the title or he has already put in the paperwork to get the title to you, my understanding is that the dealers still owns the car. Maybe I'm wrong, but I think that if you do not take it back and renegotiate, he can have it repossessed.

mudhousehold

Doesn't everyone know? The official program site is http://www.cars.gov . It links to http://www.fueleconomy.gov for MPG calculation.

There are a lot of private sites out there such as the one you used that take advantage of this heat and try to make money off of the web traffic to their sites. Unfortunately, they carry wrong or out-dated information that only misleads people. They don't care as long as their sites show up on the search result so they can get a lot of clicks. I myself don't even click .com and .net URLs that contain cash for clunkers string these days.

billsbuddie

You need to "read" your paperwork. If you signed a waiver that indicates that the deal is contingent upon the government accepting your clunker you are probably screwed. If you did not sign such a document then the dealer is probably screwed.
Some of those dealers are so caught up in finally getting to sell some cars that they have not done their homework, there may be some sorry dealers. On the other hand, buyers that don't read and understand their contracts, what can I say.

gagrice

Need some advice

You are probably screwed. If you put too many miles on the car they will probably bill you for that also. If this deal was done prior to July 24th you may be able to challenge the mileage figure. I don't understand how the dealer could be that dumb either. I guess I can. It takes them several days to register the car so they have the MSO. I usually buy out of state and get the MSO when I give them the check. I then take that to my state's DMV and get the title and license.

kdhspyder

In the meanwhile we booked 10 or 12 more today leaving us with a worse problem. We're running out of inventory. With August always being the biggest selling month of the year we now sit at 21 days of inventory on hand with maybe another 15 days of inventory inbound. That's impossible.

Pretty soon we're going to be selling new models of Corolla's and Prius', ones that even Toyota hasn't seen.
..the 2010 Toyota Corolla CrewMax 5.7L 4WD.
..the 2010 Toyota Prius SR5 V6 4WD

Right after that we're going to be selling white stripes with huge discounts. Why will C4C slow down? Watch, shortages of certain products come midmonth will mean that a good number of C4C orders won't be able to be sent to the DOT until the new vehicles are shipped and arrive on the lot.

Another unbelievable day.

Two thirds of sales today are CARS sales. In two days 25% of the on-hand inventory has vanished. White lines and empty are rows showing up all over the largest store in 200 miles.

94gs

I am surprised the dealer did not check the official site for the MPG rating. The side-by-side (clunker vs. new vehicle) printout that shows the eligibility and voucher amount should be a must check document.

There is a mistake, and the best is to settle with the dealer (ask for a better trade-in value from the dealer for your 19MPG "clunker"). The dealer has your money and the certificate of origin for your new car; you won't be able to register the car after the temporary tag expires.

kdhspyder

1) Yes and I've never hidden that fact.
2) Yes again. Margins on new cars sales are often low but that doesn't mean that the total margin on the new car sale is low.
3) We give away the standard maintenance service free - forever - to every new and used car buyer. That generates zero profit.
4) I was a steel supplier to the auto industry for 25 years. Every Mustang, Crown Vic, GM truck, and all Chryslers carried the steel I sold to them. Ditto every Michelin or Goodyear made in the US. Now I've retired to sell and train at a large Toyota store.
5) Your whine about not supporting the auto industry is noted and will be given its proper consideration.

None of your complaints contravenes my response to your post. You still don't understand the first thing about sales and production of vehicles in the US.

jeffyscott

Did you actually finalize all these or are you waiting for confirmation that there is still money available in the program (or for the government to approve more)?

kdhspyder

If you have the background that you report then think deeper about this program. It's not only about the automakers. Think man...who benefits? And why?

philliplc

a 5.7L corolla would be badass

kdhspyder

Auto dealers' association advises members to play it safe and avoid Cash for Clunkers deals this weekend.
...
The House of Representatives allocated $2 billion more on Friday to continue the program after it apparently burned through its original $1 billion budget in the week since its official July 24 start date. The measure faces opposition in the Senate, however.

We did just the opposite.

kdhspyder

True this. The discussion of this has been going on for 4-5 months. Ever since it was shown that it worked in Germany we here have been shaping our own plan.

LOTS of input from varied sources.

kdhspyder

Except that over the last 15 years there's been nearly 50 million of these 'clunkers' sold. 700,000 or even 1 million units is a tiny drop in the bucket. What it might do is flood the secondary parts market temporarily with excess parts for repairs, etc. as these clunkers get parted out.

jeffyscott

We did just the opposite.

...and if the Senate does not bail you out by going along with the House and approving more money, what then?

kdhspyder

Another typical negative republican whine. This program is not the idea of Obama and the democrats. It's the idea of the very model of American capitalism, the US auto industry.

In case you've missed the last 1100 posts this legislation was written in Detroit and Torrance then handed to the Congress critters to make it legal.

gagrice

There is a good chance Feinstein will get her way now. That may queer all the weekend deals. If they throw used cars into the mix it will be real exciting. I tell you what. This is better than the Super Bowl Game.

It would be really great if everyone cashed in their clunker and took bus tokens instead of buying a new or used car. Would clear a lot of junk off my highway.

The bill specifies that during the first year of the program, vouchers will be issued for the following amounts:

* For traded-in vehicles that are model year 2002 and later, drivers would receive a voucher for:
o The purchase of a new vehicle: $4,500
o The purchase of a used vehicle: $3,000
o Transit fare credit: $3,000
* For traded-in vehicles that are model year 1999 – 2001, drivers would receive a voucher for:
o The purchase of a new vehicle: $3,000
o The purchase of a used vehicle: $2,000
o Transit fare credit: $2,000
* For traded-in vehicles that are model year 1998 and earlier, drivers would receive a voucher for:
o The purchase of a new vehicle: $2,000
o The purchase of a used vehicle: $1,500
o Transit fare credit: $1,500


That means I could get 9.25 years of passes on the San Diego transit system for my old Ford Ranger. Heck of a deal. Wonder if the bus has a trailer hitch so I can haul stuff in my utility trailer? This is more fun than SNL.

czp

We're in the process of trading in our 2002 Ford Explorer 4WD for a 2009 Honda Odyssey. Both cars meet the eligibility requirements for the C4C program, except that the dealer is claiming that we cannot have the "check engine light" on in the Explorer when they take possession of it. (Some valve needs to be replaced in the Explorer.) We drove it there, it drives fine, they're going to destroy the car anyway, so what gives? I can't find a single thing about this on the CARS website or in the PDF file of "The Rule." Can the dealer really make such a stipulation or should we call the CARS hotline and get them on the dealer's case about this? Worst case, we were just going to pull the battery for a few minutes to reset the computer in hopes of the light turning off.

kdhspyder

You're right. We have a stipulation as an addendum to the contract that if the rules change or the program sells out then we have the right to recind the contract and return everything to square one before all discussions began.

The customer has to agree and sign it before even going into the business office. No signature then no deal. No one has resisted at all. Everyone understands the protection ( for both sides ).

kdhspyder

WE finalized them as far as we could take them based on the documentation. We spotted nearly all the vehicles. The statement from the WH that any deals done this weekend would be honored...whether Congress extends the program or not... was our basis for being so agressive. But we're also protected...see post just above.

As you know noone negative is successful in sales.

gagrice

GO to a different Honda dealer. I can't believe a 2002 Explorer is not worth more than $4500 in trade.

kdhspyder

See for reference the statement from the WH today. Any sales done this weekend will be honored.

However if there are any glitches....see post just above.

paul007

"3) We give away the standard maintenance service free - forever - to every new and used car buyer. That generates zero profit."

When that vehicle comes in for that "free" service it gives the service writer a perfect opportunity to sell the customer additional services and/or products. Anything that increase traffic in either the sales or repair departments is money in the bank. Stores everywhere have loss leaders just to get people in the stores.

paul007

This is nit-picking on the part of the dealer. The car is driveable per the law, but not perfect. Push come to shove, the engine is going to get destroyed anyway so just go ahead and pull the bulb out of the socket for the "check engine" circuit.

fintail

A miled up neglected lowline 7 year old Exploder shouldn't be worth more than that in trade - pristine loaded ones can be had for under 10K all day long.

gagrice

I just know how I take care of my vehicles and I cannot imagine one of mine being trashed after only 7 years. My 98 Suburban sold in 2005 for $16k was pristine with 45K miles on it. Maybe they ran it into the ground. I know some people have no regard for things of value.

just_looking09

I bought a car on the 16th, the dealer gave me 4500 on the c4c program for my suv
I have a signed bill of sale listing the 4500 as cash down.

they did not have me sign any paperwork for c4c because it had not started yet.

a week later I helped a friend buy a car and trade her old clunker getting c4c money.
I was checking the mpg #s and found my new car is listed as 20, my old car was a 14,
the new car they sold me does not qualify for the c4c.
the dealer called and wants me to come in and sign the c4c papers now.

I just do not know what to do,
It was not my mistake and I do believe the dealer knows that the car he sold me does not qualify for the program. I am sure I will have a problem when I go in the dealership to sign the c4c papers on a car that does not qualify.

any help on this please

fintail

I know what you mean. I have a 7 year old car with just under 40K on it...it still looks pretty much new.

We are in the minority. A lot of people are simply ignorant and careless. Many cars are lost causes by the time they are 10 - and 7 isn't far off. CFC will claim some 21st century machines.

kdhspyder

Yep...we count heads every month.

We have 6 times as many bodies coming in for 'free service' as we do fresh ups coming in to look at vehicles. Many of those service customers have vehicles that need work, expensive work, and many are simply tired of their current ride.

Anything that generates volume is good.

kdhspyder

Rules are rules. You're going to have to bring it back or they're going to send a tow truck to your home and take it back.

We didn't do this but other stores in our area did do it.

johnnymurph

With all of the clunkers that are still road worthy, there is an organization called "Vehicles for Change" that will accept vehicles in running condition, if they pass their inspection guidelines, which are;

(1) will pass state inspection (having decent tires, etc.)

(2) can be repaired by a mechanic for less than $800.00 in parts (as mechanical labor cost are donated).

The neat thing is this - if every thing is o.k., and it seems most of the post for C4C's are, you will receive documentation as to where you can deduct Blue Book Value for your vehicle to be used for tax purposes. Just a thought. Not as much money as C4C, but vehicles put to good use, not destroyed.

dubforclunker

I re-read all the documents I’ve signed. Nowhere does it say the deal is contingent of my old car qualifying for the Clunker Program. What I do see is a waiver that says I waived the right to ask for a full refund or whatever. Basically they don’t want me to return the car.

Thanks for the reply

dubforclunker

Really such stipulation? I can’t imagine that once the deal is finalized and you put say 100miles on the new car, the money runs out and dealers can’t get the rebates they everything to square one. Hard to imagine, but you sure you read such stipulation on some document?

Thanks for the reply.

dubforclunker

Really? Isn’t that against the law or something? what if in the case that you have all the paper work signed and check/credit card given to them that they can refuse the deal after you drove off the lot? And to come to your property and tow your car? I can understand if you don’t make payment but that just seem a bit extreme. We do have laws in this country that protects us don’t we?

dubforclunker

Isn’t it by law that once the deal is done that dealers are required to send me the title? If they don’t, I’m not sure what legal avenue I can do to force it but can I always go to the DMV and just do it myself since I have all the documents stating that I purchased the car fair and square?

To come to my home and repossess my car? WOW I hope that’s not against the law or anything.

Thanks for the reply.

kdhspyder

I've done 5 such deals myself and on each and every one I've had the buyer sign the addendum.. no problem. It's a separate document our attorney's created before we began doing business under the program.

We are also very very confident that everything booked and finalized through today 8-2 will be accepted under the program. That was the word from the WH yesterday.

I personally think that the the Senate will approve the additional funding before they leave thus extending the program even further.