The NHTSA has responded to urgent pleas of car dealers who are running out of new car inventory.

Consumers can now order a car that is in production or in transit to a dealer and still qualify for the Cash for Clunkers rebate.   The car does not have to be physically in stock. 

The move came as dealers and automotive groups applied pressure on the NHTSA to meet local demand.  The ruling is not without controversy.

Dealers Can Now Factory Order CARS

Dealers who want to file deals for an ordered vehicle must first obtain the new car’s vehicle identification number from a manufacturer, NHTSA said in a statement. Reimbursement requests still must have all required documents for the trade-in vehicle. 

This adds an interesting development.  If the car will be arriving in September, dealers may not be able to add August factory rebates to the deal.

This decision looks like a win for consumers in local markets that have depleted inventory and a loss for dealers who took the risk to stock up on popular cars before the Cash for Clunkers program started.  Dealers who have contact us have mixed opinions on today’s latest change in CARS rules.

One dealer wrote to say:

 ”I invested over $500,000 to bring in extra cars for the program because I knew it would be popular.  I thought that I would have a strategic advantage and be rewarded because my local competition did not stock up.  Today’s decision took that away advantage.  This is just another example how changing rules have made it difficult for dealers to support the program.”

This is not to say that the dealer was not pricing their cars competitively.  It is just saying that dealers who took an entrepreneurial risk got up ended by the NHTSA.

From dealer reports, Ford was caught unprepared for the demand. Ford dealers we have surveyed have been the hardest hit by lack of inventory.  The industry veteran that we spoke with said that the NHTSA concession today seems to favor the Big Three US automakers that are low on inventory while foreign manufacturers seem to have more supply. 

NHTSA Clarifies Sales Practices

Dealers and consumers have been active on our forums regarding yesterday’s announcement that dealers cannot hold new cars on transactions that have all paperwork submitted.  Read our forums to see that many dealers are thumbing their noses at the NHTSA and consumers saying “NO WAY BABY”.

Tags: cars sales, cash for clunkers, dealer factory orders, nhtsa