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Of course not. Several weeks into the "cash for clunkers" program it turns out that delivering a couple of billion dollars worth of rebates to hundreds of thousands of car buyers can generate a few flat tires. The Department of Transportation's latest update on the Car Allowance Rebate System shows that the government has received applications for about 412,000 rebates totaling $1.7 billion. But so far, the feds have approved only a fraction of those, leaving dealers furious.

More fom U.S. News & World Report

» ars Hurt e Most By the Recession

» CarsGetting a Boost From the Recession

The Transportation Department won't say exactly what the rejection rate is, but in an Automotive News survey, some dealers said up to 80 percent of their rebate applications had been rejected. Some dealers are waiting for payments totaling as much as $200,000, the survey found. About 13 percent of dealers said they've suspended clunker deals because of red tape and concern about getting paid by the government.

Prediction: They'll be back. Buyers, meanwhile, should make sure the dealer isn't putting the burden of obtaining a rebate on them. And those still looking for a clunker deal should be able to find plenty of dealers continuing to play

It's obvious that the National Highway Transportation Safety Administration, the agency administering CARS, has been overwhelmed by the popularity of a program that has surprised just about everybody, including the masterminds in Congress who had to triple the funding a week after clunkers kicked in. NHTSA initially detailed 225 people to processing those 400,000 claims; it's in the process of assigning 1,000 more to the program to help speed up the rebates.

To put this in context, there are only about 635 full-time workers at the entire agency, and their principal job is to set safety standards, perform crash tests, conduct research, and regulate the automakers. So NHTSA is swelling to nearly twice its regular size—by borrowing workers from other agencies—to manage a program that will come and go within six weeks. I guess they'll get back to worrying about safety after Labor Day, when CARS expires.

NHTSA also has to make sure nobody's claiming that a rusty tricycle constitutes a clunker worth $4,500 toward a new ride. Don't get me wrong, I'm not suggesting that anybody would ever attempt to take advantage of wanton congressional spending and defraud the U.S. government. But do we trust car dealers and their customers enough to go by the honor system? Many of the rejected clunker claims are being sent back to dealers because of paperwork snafus like unsigned sales agreements, mismatched serial numbers, and forms that fail to include the make, model, and year of the clunker being traded in. Hmmmm. Those are all harmless mistakes, no doubt. But if people at NHTSA weren't eyeballing every application, chances are that there would be a newspaper headline somewhere declaring "Man Gets Clunker Rebate for Matchbox Car." It still might happen.

Dealer groups have been meeting with NHTSA to straighten out the foul-ups and make sure their own members are following procedures and playing by the rules. Odds are this will all get sorted out soon, the pace of rebates will pick up, and dissident dealers will quiet down and rejoin the program.

Meanwhile, delayed rebates have caused tension between some dealers and their customers. Just like money to ruin a beautiful relationship.

The government has gotten complaints about a few dealers who seem to be putting their customers on the hook in case there's a problem with the CARS rebate coming through. Now, in a negotiated deal it's always a good idea to put the financial risk on the other guy. Except that in the CARS program, dealers aren't allowed to do that. Banned practices include forcing the buyer to leave a deposit for the amount of the clunker rebate, in case the government doesn't cough it up, and forcing the buyer to sign an agreement to pay the dealer the rebate amount if the government rejects the application. In general, the burden is on the dealer, not the car buyer, to dicker with the feds and make sure the paperwork is correct (unless you lie on the application, which could invalidate the whole deal). Consumers can see the complete list of rules at (look under the FAQ), and buyers can report suspicious dealer activity to the government by calling 866-CAR-7891.

The popularity of the program has also caught manufacturers by surprise, one reason they've run short of some vehicles that clunker traders want to buy. Some dealers have sold out of models like the Jeep Patriot and the Ford Focus, for instance. Buyers were left wondering whether they can still get a clunker deal when the next shipment arrives or should pick another vehicle. So the government has tweaked the rules to include new cars that aren't on dealer lots but are in the production pipeline. As long as the dealer can identify an actual vehicle and its vehicle identification number, or VIN, the clunker deal can go through, even if the car is delivered after the program expires. Buyers need to make sure the VIN of the car they ultimately take home is the same as the VIN on the original sales agreement and watch out for any other kind of bait-and-switch.

If the nearest dealer has bailed out of the program, look for another. Despite the problems, there are plenty of reasons for dealers to stay involved with CARS until it expires. With the government subsidizing the cost of so many new cars, the program is obviously boosting sales. But it's also drawing other shoppers who end up buying a car even though they don't qualify for a clunker deal, and it's generating business in dealers' service departments as well. And with many buyers who qualified for a clunker deal already enjoying their new ride, the frenzy is starting to subside. That should give the government time to catch up and placate the dealers. A little haggling is just part of the process.;_ylc=X3oDMTFsNDYyY3RxBF9TAzI3MTYxNDkEc2VjA2ZwLXRvZGF5BHNsawNjYXNoLWNsdW5rZXJzLWF2b2lkLXNuYXJs

1,271 Posts
And of course, the good ol taxpayers will wind up funding the deficit ON TOP OF already funding the original give away. This administration is so full of FAIL that its not even worth talking about it. The think "Oh, we will help our country go green, help the automakers get their revenue up." So lets GIVE away money. Duh, what a bunch of dorks.

I know we can count on Mr Weiner to straighten things out.

2,003 Posts
Sounds like a case of too much of a good thing... Government is being overwhelmed by the success of giving away money... can't figure out why.

147 Posts
Going green is the biggest scam going...

I'm all about doing our part for the environment and I do participate but the MILLIONS of dollars generated in the "green" marketing campaign has been WAY more beneficial to the powers that be than the environment. Carbon tax??? Oh ya! That will cut down on pollution... This is a global elitist agenda!
Poor boys can't play with the big boys!
Government 1 - US citizens 0

This process is also known as holding a monopoly. It chokes out small businesses by offering lower prices than the smaller competitors can offer to it's (former) loyal customers. Manufactures know that the consumer loyalty remains with "the better bang for the buck." And when the products large corps sell come from ie China... ie COSTCO - Chinese Of Shore Trading Company, the consumer -in tough times- b/c of convenience makes their purchases from the big box stores.
Government 2 - US citizens 0

What better way to make players in the market *fold* b/c the stakes got too high?
This faceless monster doesn't bust down the doors with guns a blazin.... the pressure is on the small business owner. They make You say uncle while remaining the good guy.
Government 3 - US citizens 0

The green program, while it leeches from the truth of *trying to make earth a greener place to live* continues down the slippery slope of consumerism at the cost of our environment. Government 3 - US citizens 0

Is the program minimizing waste and pollution? NO! The question that needs to be asked is, "Is the program minimizing the companies that create pollution?" The answer to that question is YES!
Government 4 - US citizens 0

It is only cleaning up the un-surrendered entrepreneurs who built this country and are now left with foreclosures and bankruptcies only to leave it to their closest legal living relative.... The government.
Government 5 - US citizens 0

If you want a GOOD laugh click the link below to see what the US Gov is attempting to do with the money they don't have until they've raised your 2010 taxes!!

Game, Set and match! Thanks for playing!! Without YOU the tax payer NONE of this would be possible.

I asked the people I work with, "Name ONE thing that you are thankful for about being a citizen of this country of ours?"

Think about it for a moment...
What would you say?
In Canada many people say health care, In the US many people would say freedom! LOL I laugh at both answers!!

The BEST THING about any business? The most VALUABLE commodity to ANY business IS IT'S EMPLOYEE'S!

I AM MOST THANKFUL FOR YOU THE TAX PAYER!!! The government has gotten WAY TO MUCH credit and thanks for what YOU'VE paid for over the years!! THANK YOU THANK YOU!!!
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