Oodles of customers, but piles of paperwork bog down 'cash for clunkers'
Just a week after regulations for the federal Cash for Clunkers program were set last Friday, Mike Macik of Olivia Chrysler Center has reported the heaviest traffic he has ever seen.
That's great, he said, but he has his concerns. Not one of the eight deals he's made under the program since last Friday has yet been approved by the federal government.
The future of those deals is clouded even more by news late Thursday that the government was suspending the program, according to Associated Press sources. (See related story on Page A8.)
Each of the deals requires Macik has written include filing piles of paperwork.
Since time is money in a volume business, Macik is wondering whether any of it is worth his trouble.
"The idea was creative, but there's only so much you can do," he said.
The Cash for Clunkers program, which allows qualifying consumers to scrap their gas guzzlers for a government rebate of $3,500 or $4,500 on a new, more fuel-efficient vehicle, has auto dealers throughout west central Minnesota reporting greatly increased traffic, but countless forms to fill out and pages of regulations to page through for each deal.
Scott Lambert, vice president of the Minnesota Auto Dealers Association, said that he has heard a lot of frustration in his conversations with auto dealers in the past week.
"This is quickly turning into a nightmare for Minnesota dealers," he said. "They're scanning in 20 pages for every deal. If one detail doesn't match up, it won't get approved."
Lambert said that so far, it appears that no deals in Minnesota have yet been approved by the National Highway Traffic Safety Administration, which is administering the program. He cited a meeting of representatives from more than 150 Minnesota dealerships on Tuesday. Asked if any had a deal approved, not one person raised their hand.
Lambert estimated that 70 percent of the deals made in Minnesota under the program so far were still pending approval. The remaining 30 percent had somehow not met the requirements and had been declined. He said he wasn't sure why.
Eric Bolton, a spokesman for the National Highway Traffic Safety Administration, said earlier that it was still too early for auto dealers to be concerned. The department has 10 working days to approve any transactions, and the program has been in place only five.
As to the pages of regulations, Bolton said those are necessary to protect taxpayers from any misuse of funds.
"We have a responsibility to the taxpayer to make sure these funds are appropriately placed," he said.
Joyce Hinrichs, the general manager of Parkview Ford-Mercury in Montevideo, said that it was all the regulations that had turned her off to the program. The pages upon pages of rules are just too constraining to be worth it, she said.
"It's very frustrating," she said. "There are hours and hours of paperwork for just one deal."
Lambert said that among dealers, there is concern that money for the program will not last much longer. Over 20 percent of the $1 billion designated for the program has been doled out already, leaving many dealers with concerns that they'll be out the money from deals that they have pre-qualified and finalized, but that are still pending government approval.
It is precisely those concerns that apparently led to the decision late Thursday to suspend the program.
In those pending cases, Lambert said, the $3,500 or $4,500 has already been taken off the price of the vehicle for the customer, and the dealers are holding out faith for the government to approve the transaction and pay them back.
Mark Pregler, the sales manager at Roth Chevrolet of Willmar, said that he won't finalize a transaction under the program until he sees that it has been approved. "You're at risk, otherwise," he said.