• News
  • Celebrities
  • Finance
  • Crypto
  • Travel
  • Entertainment
  • Health
  • Others

Some Deal Hunters Stung in ‘Clunkers’ Program

Suvs.jpg
Suvs.jpg

Like hundreds of thousands of folks this summer, Anna Causey knew a deal when she saw it. Enticed by the rebates offered under the cash for clunkers program, the Summerville, S.C., resident ran her 1986 Buick Century down to a local dealer last month, scrapped it for a 2009 Dodge Ram pickup, and scooped up a $3,500 government discount for the trouble.

A month later, it doesn’t seem like such a great bargain.

Congress.jpg
Congress.jpg

Illustration by: Matt Mahurin

Causey’s trade, it turns out, didn’t qualify for a rebate based on the cash-for-clunkers’ mileage requirements. Though she’d signed all the papers, swapped the tags and updated her insurance policy, Causey was called back to the dealership shortly afterward and presented with two options: either accept a new contract — one that would grant $1,000 for the old Buick and require that she pay back the $2,500 difference — or give up the truck. Thinking a deal’s a deal, Causey and her husband chose a third route: they stormed out, and hired a lawyer instead.

“I didn’t even look at the new paperwork,” the 68-year-old Causey said in a telephone interview Friday. “I’d signed a contract. We walked off with the contract thinking we owned a truck.”

As the Obama administration begins winding down the $3 billion cash for clunkers program, similar stories of consumer frustration are popping up nationwide. While a great deal of ink has been used to chronicle the trials of the auto dealers — many of whom have become rankled by the slow pace of federal reimbursement — much less has gone to point out that there are consumers out there feeling roughed up as well. Some bargain hunters have been prevented from driving their new vehicle off the lot until Washington approves the rebate. Others have been asked to sign liability waivers placing all the risk on themselves rather than the dealers. And in episodes like the one involving the Causeys, some dealers are allowing trades under the cash-for-clunkers banner only to retract them later, leaving both dealers and consumers pointing fingers in agitated blame.

John LaPuma is in one such bind. In July, the 48-year-old from Olathe, Kan., traded his 1998 Ford Windstar, a 6-cylinder mini-van boasting around 192,000 miles, for a spanking new Nissan Frontier pickup. After the dealer gave him a $3,500 clunkers’ discount for the swap, he paid the remaining balance in cash and drove off. The next evening, however, the dealer called with bad news: the Frontier didn’t qualify for the rebate. Yet when LaPuma checked Nissan’s Web site afterward, he found that his trade was still being advertised as eligible for the discount. “We’d made a deal here,” LaPuma, an employee of Anheuser Busch, said in a telephone interview Friday. If his trade didn’t qualify for a clunkers’ rebate, he added, the dealer “should have known this ahead of time.”

Dave Tolbert, managing partner at Olathe’s McCarthy Nissan, where LaPuma bought the pickup, said the confusion arose because the truck qualified on the DOT’s Web site one day, but was dropped from eligibility the next — an updating of mileage standards that’s affected dozens of vehicle models and left frustrated dealers and buyers alike as they feel their way through the young program. McCarthy has resubmitted the application, Tolbert said, along with a print-out of the original Web page indicating that the Frontier once qualified for a rebate. The verdict should arrive, Tolbert said, by the middle of the week.

Matthew Nappi, 27, a systems administrator, said he also ran into trouble under the clunkers program. It wasn’t that his dealer wouldn’t grant the $4,500 clunkers’ rebate when Nappi scrapped his 1995 Infiniti J-30 in favor a 2010 Toyota Corolla. But the salesman did ask the Coram, N.Y., native to sign a contingency agreement putting him on the line for that amount if Uncle Sam rejected the application. Initially, the dealer also prevented Nappi from driving the Corolla off the lot, forcing him back into his clunker even after the sale. “In my ignorance I really didn’t know that wasn’t normal,” Nappi said by phone on Friday.

For Nappi, the saga ended happily. After learning more about the program guidelines, the dealer eventually voided the contingency agreement, he said, and allowed him to drive away in his new Corolla. “They weren’t being malicious,” Nappi said. “They just wanted to cover their backs.”

Still, such tales have ignited concerns among consumer advocates that some dealers might be gaming the clunkers program by asking consumers to front the rebate money from one end, while the government pays from the other. While there are safeguards in place to ensure that trades qualify and clunkers are scrapped, there’s “no mechanism” to guarantee that the dealers haven’t already collected rebate money from consumers, according to Rosemary Shahan, president of Consumers for Auto Reliability and Safety.

Joined by Public Citizen and Consumer Action, Shahan’s group is asking the Department of Transportation to require dealers, as a condition of receiving their federal reimbursement, to attest in writing that they haven’t already collected the rebate from the customer — “a basic audit,” Shahan said, “to see if some of these dealers are double dipping.”

Not that the administration isn’t aware of some of these problems. The website for cash for clunkers — formally called the Consumer Assistance to Recycle and Save, or CARS, program — addresses several of them specifically. “Consumers are not required to sign contingency agreements to pay back the dealer should the CARS credit be rejected,” one passage reads. “If the dealer has the new car in stock, the dealer must allow you to take possession of the new car before the dealer may submit the credit application to the government,” states another.

Still, those rules haven’t prevented some dealer groups from continuing to endorse a system that protects dealers at the expense of consumers. The Minnesota Automobile Dealers Association, for example, has posted on its Website a standardized form designed to transfer all the risk surrounding cash for clunkers’ deals from the dealer to the consumer. “The dealership believes in good faith that your trade-in vehicle qualifies for the CARS incentive and that funds will be available,” the form states. “However, the risk of the federal government not paying the incentive is yours — not the dealerships.”

That stipulation, advocates say, puts an unfair burden on the consumer, who might not have bought the vehicle without the promise of a clunkers rebate. “This is a new program,” said Shahan. “It’s complicated. It’s confusing. And you’re in the showroom relying on the dealer to help you through it.”

In some part, the troubles facing the clunkers’ program are symptoms of the program’s wild success. Launched precisely a month ago, the $3 billion initiative — which grants cash rebates up to $4,500 to drivers who scrap their gas guzzlers in favor of more efficient new vehicles — has stimulated more than 457,000 new auto sales, tallying $1.9 billion in dealer rebate applications. The White House, being careful not to outspend its allotment, has scheduled the program to end at 8 p.m. Monday.

But the sheer volume of applications ensures that the processing of payments will continue for weeks longer, if not months. Not expecting the deluge, the government was initially understaffed. Traffic to the CARS Web site has been so heavy at times that some dealers wait to log on at midnight, when the site might function faster. The combination of factors has caused government approvals to lag well behind voucher submissions. Indeed, of the $3 billion the DOT expects to spend on the clunkers program, the agency has paid out only $145 million to dealers, a senior administration official told reporters last Thursday. The slow pace of approvals has left both dealers and consumers to negotiate an uncomfortable limbo while they await the OK from federal screeners.

James Wang is in such a position. In mid-July, the Orlando accountant traded his 1993 Toyota Camry for a 2009 Honda Civic, getting a $4,500 clunkers rebate in the process. But the DOT altered some of the eligibility rules later in the month, disqualifying the Camry as a trade-in vehicle. The dealer asked Wang for either the $4,500 or the car, calling frequently, sending certified letters, and threatening to report the car as stolen if Wang didn’t comply. More recently the 28-year-old learned that, because he’d bought early in the program, his Camry would be eligible for the rebate.

The deal hasn’t gone through just yet, Wang said, but “instead of calling me every other day, at least they’ve stopped bothering me now.”

Many dealers have lost their patience, dropping out of the program altogether.

Bob Loquercio, owner of four Chicago area dealerships, said his experience with cash for clunkers has been “a giant nightmare.” His dealerships have sold 227 vehicles under the program, but so far he’s been reimbursed for only four. The government, he added, owes him “more than $1 million.”

“It’s a typical Obama administration, giant-government screw up,” said Loquercio, former chairman of the Chicago Automobile Trade Association.

For Anna Causey, of South Carolina, the future remains uncertain. She and her husband have hired an attorney in an effort to keep their new Dodge Ram. In the meantime, they’re still driving it around. “We own the truck,” she said.

Kris Whittemore, sales manager at Hoover Dodge in Moncks Ford, S.C., where the Causeys made their trade, declined to comment, his brief statement providing indication that the clunkers program still has a few kinks to be ironed out. “My take,” he said by phone Friday, “will be through my attorney.”

Discussion & Comments (0)

    Recent Articles

    • Things You Should Know about North America

      Things You Should Know about North America

      Get to know more about North America.

    • Eurovision 2010 Paula Seling Unpredictable Contest

      Eurovision 2010 Paula Seling Unpredictable Contest

      Paula Seling's experience on the Eurovision stage led her to declare that "Eurovision is an unpredictable contest". Which may explain the success of the young Lena from Germany, about whom the predictions before the event did not offer much chances for victory.

    • VIPRow.me - The Best Sports Streaming Website Today

      VIPRow.me - The Best Sports Streaming Website Today

      Have you ever contemplated creating a user-friendly site dedicated to sports-related free live streaming channels?

    • Learn How To Download, Install, And Use The Xnxubd 2022 Frame App

      Learn How To Download, Install, And Use The Xnxubd 2022 Frame App

      XNXUBD 2022 Nvidia users are able to watch thousands of videos and other contents online. XNXUBD 2022 Nvidia New is a piece of software that enables people to watch videos online without having to pay for memberships. On a graphics card, the XNXubd also provides some of the best gaming and virtual reality experiences.

    • Xvideostudio Video Editor Apk Free Download For Pc Full Version In 2022

      Xvideostudio Video Editor Apk Free Download For Pc Full Version In 2022

      A new edition of the Video Editor Apk for xVideostudio.Video Studio has all the latest features, including support for multiple video download formats in HD, FHD, and even 4K resolutions.

    • 9 Best Lotion For Masturbation - Popular Choice For 2022

      9 Best Lotion For Masturbation - Popular Choice For 2022

      Masturbation is a common activity for men and women. It's a natural and risk-free way to explore your body, experience pleasure, and release sexual tension.

    • Reasons Why You Need To Stop Watching Movies From Sflix

      Reasons Why You Need To Stop Watching Movies From Sflix

      Without having to sign up or pay anything, you can watch movies online for free with SFlix. It has more than 10,000 movies and television shows.

    • Coi Leray Mom And Dad's Family History & Wife, Explained

      Coi Leray Mom And Dad's Family History & Wife, Explained

      Coi Leray Collins (born May 11, 1997) is a rapper from the United States. Leray started publishing songs to SoundCloud in 2014, and in 2018 she released her breakthrough track "Huddy" as well as her first mixtape, Everythingcoz.

    • Listen And Download Music On MyFreeMP3 For Free

      Listen And Download Music On MyFreeMP3 For Free

      Are you in a bind and looking for a place to obtain free mp3 songs? Never again will you need to bother, since this article has everything necessary to obtain your solution. Download free music from MyfreeMP3.com, one of the world's most popular websites.