This past weekend marked the end of the governments cash for clunkers program, and for some dealers the honeymoon is over. In an Automotivenews.com article many dealers spell out the problems they have been having with the program. Many dealers who are taking part in this program are working hard to reach those expected sales milestones; while others have been buried in paperwork just to even get the government rebates. Here are the few problems that dealers are having with the clunkers program.
1. Rarely smoothly
The store took in 60 clunkers and had been reimbursed for just seven by Saturday afternoon. Eret says he has been filing 13 to 18 documents per clunker trade as well as filling out online forms.
If everything goes well, he said, that process can take as little as 40 minutes. But it has rarely gone smoothly, and the store doesn’t want to be left being owed thousands of dollars because of paperwork troubles. “We want to do last-minute deals,” Eret said, “but we have to make sure we can get reimbursed.”
- So the more clunker deals that are done; the harder it will to be paid for the rebates. Out of 60 Clunkers the dealer was only paid for 7; that ratio doesn’t seem to add up. Its not that the dealer wont get his cash; he may just have to wait a bit longer to see that check.
2. Busy, but not crazy
Nearly all the sales staff at Dean Sellers Ford in suburban Detroit were working with customers in the showroom Saturday just as the store was winding down its clunker trades. “It’s been busy, but I can’t say it has been crazy,” said Dean Sellers, the general sales manager. “It’s not like everyone waited until the last minute. They knew it was coming to an end.”
Sellers said he’d only do another clunker trade if a customer came in with all the required paperwork that would ensure the deal wouldn’t be rejected by the government. “Our goal, if we put a clunker deal together now, is to have the paperwork in by noon on Monday,” he said.
- Many dealers have seen a spike in showroom traffic since the government program started; but out of all those customers many didn’t not qualify for the program, when they don’t qualify they leave the showroom floor. In another complaint one dealers in Detroit sold 120 clunker deals and has only been paid for 14 so far.

Cash For Clunkers has is a double edged sword
3. Computer crash
“The government’s computer system crashed yesterday,” said Rick Szmigiel, sales manager at Ferndale Honda just north of Detroit. “The paperwork is going through the system, but we are seeing some rejections,” he said. The store did 22 clunker deals since July.
The Transportation Department’s cars.gov Web site for dealers was down for at least an hour yesterday afternoon, preventing dealers from filing rebate claims as the four-week program heads into its final days.
That computer crash was one reason the National Automobile Dealers Association and Japanese automaker Mazda Friday asked the Obama administration to extend the Monday deadline for submission of cash-for-clunkers claims. They cited concerns over the ability of government computers to handle a surge of final sales.
- Wow, in today’s day and age the clunkers computer system crashed? With all the social media hype the new administration has been boasting about, they cant keep the clunkers program computers up and running. This also brings to light another concern; how will they handle the back log of paperwork even after the program is over this week?
4. No extension
A spokeswoman for Transportation Secretary Ray LaHood said the deadline would not be extended.
“Secretary LaHood said the program will end Monday at 8 p.m. That remains the case,” spokeswoman Jill Zuckman said in an e-mail Friday.
Zuckman said the computer outage “was related to the substantial increase in capacity that the department is bringing online to review transactions and process payments to dealers.”
She said the problem has been fixed.
Mazda North American Operations, like NADA, said an Aug. 24 deadline for new car sales under the program was acceptable. The automaker asked for an filing-deadline extension of three or four days.
-It would be nice to extend the program; but we knew it would come to an end. But maybe the program could use a break to measure its effectiveness and reach. It would be a great idea to suspend the program, evaluate what is working, fix the glitches in the system and then maybe roll out a new plan which is works better for the dealers.
5. Low inventories
At Tamaroff Honda in suburban Detroit, there were few customers in the showroom Saturday, though the phones were ringing. The store took in about 100 clunkers before cutting off the program Thursday. “We got rid of many ’09s and we are a bit low on inventory,” said salesman Treniel Williams.
Asked to compare Saturday’s showroom traffic with volume seven days earlier, he said: “Last Saturday we were booming.”
Most dealership officials expect a sharp drop in business next week,
- This sharp drop in business within the next week will cause many dealers to start crying out for the clunkers program again. Many customers will stay home now that they rebates are not government backed and now the dealers are low on inventory. Wow looks like the cash for clunkers was a success, depending on who you ask.
6. AutoNation, Group 1 halt
Two of the nation’s biggest auto chains — AutoNation and Group 1 Automotive Inc. — also pulled the plug early on cash-for-clunkers.
AutoNation said that it would halt all clunker deals at the close of business Friday at its stores.
A staff of 40 to 50 people at AutoNation’s main back-office operation in Dallas was to spend the weekend attempting to process about 1,000 contracts that had not been submitted yet, AutoNation spokesman Marc Cannon said.
Cannon said that AutoNation has been reimbursed on a small number of its 11,000 clunker sales. On Thursday, Cannon said AutoNation was owed $45 million for its clunker deals.
- Even the largest auto chain is owed $45 million in clunker sales; what makes the other smaller dealers believe they can get they cash on time. Its not question why they are choosing to halt the program.
The Cash For Clunkers program was a success; the object was to get people to start spending more and to get the auto industry back on track. It wasn’t put in place to fix everything. But one thing is clear; many are unhappy with the results. But as many dealers are busy on their paperwork and trying to get reimbursed lets hope all of this brings the economy back on track.
Source: http://www.autonews.com/apps/pbcs.dll/article?AID=/20090822/ANA05/908229994/1078&AssignSessionID=373326151678011