“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 into a success, the government finds a way to muck it up.

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