“Cash for Clunkers” Crashing Into the Bureaucracy

Why am I not surprised that the “cash for clunkers” program may already be a bureaucratic hairball. A reader who uses the pseudonym Jaxon left a comment that directed me to the Ex-Car Salesman Blog. He has some interesting behind the scenes info.

First, because of the popularity, there is a huge backlog of paperwork. The 20-page application requires data from various sources and in many cases takes days to complete. Dealers continue to sell cars while they wait for all the information required. Of of the many hold-ups is the fact dealers must disable the ‘clunker’ with two quarts of a special sodium silicate solution before before the car crushers can give them a required signature. However, many dealerships have run out of this solution or have not received it. If dealers continue to advance people the CARS credit, on faith the government will refund them for destroying a car, their cash flow will soon be depleted.

Second, the CARS dealer website — where dealerships submit applications — cannot handle the traffic. Dealers continuously report website crashes rendering them unable to submit their application. This increases the amount of time dealers must wait before they receive their rebate check — depleting cash flow.

Third, worry is building in many dealerships because many applications for the rebate are being denied after the car deal. Some on this blog have expressed outraged after dealers have called them back demanding the customer make up for the denied CARS rebate (up to $4,500.00) or else they would have to return the car immediately. Some have had their trade-in cars already destroyed.

Here’s a video he posted from a Midwest television station that addresses some of the problems:

Can someone in Washington please take the reins and get this done right? Even when they stumble they stumble into a success, the government finds a way to muck it up.

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About Tom Lindmark 401 Articles

I’m not sure that credentials mean much when it comes to writing about things but people seem to want to see them, so briefly here are mine. I have an undergraduate degree in economics from an undistinguished Midwestern university and masters in international business from an equally undistinguished Southwestern University. I spent a number of years working for large banks lending to lots of different industries. For the past few years, I’ve been engaged in real estate finance – primarily for commercial projects. Like a lot of other finance guys, I’m looking for a job at this point in time.

Given all of that, I suggest that you take what I write with the appropriate grain of salt. I try and figure out what’s behind the news but suspect that I’m often delusional. Nevertheless, I keep throwing things out there and occasionally it sticks. I do read the comments that readers leave and to the extent I can reply to them. I also reply to all emails so feel free to contact me if you want to discuss something at more length. Oh, I also have a very thick skin, so if you disagree feel free to say so.

Enjoy what I write and let me know when I’m off base – I probably won’t agree with you but don’t be shy.

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