Newsline

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”.

Consumers writing to www.cashforclunkersfacts.com are reporting that the NHTSA website (www.fueleconomy.gov) designed to provide mpg guidelines for the Cash for Clunkers program is flawed.

FuelEconomy.gov is being used by the NHTSA to qualify vehicles for the Car Allowance Rebate System (CARS).  Official instructions for the CARS program tell consumers that this website is the sole basis for qualification.

But consumers are wary since data is changing.

Consumers are writing to us to document that vehicles that qualified as recently as a week ago are now disqualified.

Dozens of consumer compliants are being reported so this does not seem to be an isolated incident.  If this is true, this could undermine the entire qualification process.

Arbitrarily changing data would create even more confusion about the controversial CARS program. The changing data would also create a liability for car dealers making deals based on this data. That would be devastating for car dealers caught in the middle of a data change.

Consumers Are Confused

Writing on www.cashforclunkersfacts.com a consumer said ” My car a 1991 Lexus ES250 V6 automatic was checked by the dealer with 18 mpg combined last Monday using the fueleconomy.gov. Based on that a new car was ordered. Today using the NHTSA Updates Fuel Economy Website for CARS the combined mpg has been changed to 19 mpg combined. The combined mpg number at the fueleconomy.gov also changed to 19 mpg combined.”

Scott shared his frustration: “I went to Fueleconomy.gov again to look up my 1991 Camry v6 automatic. If you look up the original old window sticker mpg numbers (18/24) and then use the converter they have on the site to update the pre-2008 MPG numbers to the new 2008 calculations you will get (16/22) which is not what the CARS calculator is showing. 16/22 is what fueleconomy.gov had listed up to July 24th which allowed me to Qualify for the money. As of July 24th the numbers 16/23. I hope they fix this”

Bob added “I had my 93 Camry wagon V6 auto. go from qualifying at 18 mpg combined Thurs. July 23, to not qualifying Sat. July 25. We found this out as we filled out paperwork at the dealer for the purchase of a new 09 Pontiac Vibe. What gives?”

Jim explained how data changes cost him $1,000: ” My clunker’s mileage also increased. Yesterday it was 17 mpg and today it’s 18! (Its a 1997 Mercury Villager.) I still qualify, but the deal I made last week will now only net me $3,500, not the $4,500 I’d budgeted. If I had known last week, I’d have chosen a different new car with one extra mpg!”

Based on these consumer complaints, we hope that the NHTSA comes out with some damage control information to give consumers and dealers confidence that the website can be trusted.

Document Your Research

We advise that once you have verified your car on www.fueleconomy.gov , that you print out the page before you go to the dealership. For dealers, make sure you print a copy of the list and date and time stamp it. This will assist you in case after you make the trade, the mpg number change and the website does not show the car as qualifying anymore.

If you have had a similar experience, share your specific data below.

Car dealers who want to kick start their Cash for Clunkers marketing campaign can do so by contacting Cubic Marketing.  Customized marketing materials for the Car Allowance Rebate System (CARS) can be turned around in as little as 24 hours.

Cubic offers 2 approved designs for dealers to choose from.  Both designs can be customized to your dealer’s brand representation. 

Dealers can contact Cubic Marketing at 866-462-8242 immediately to begin producing their marketing materials and mention the promotional pricing code ‘PCG’ when placing orders.

Visit their website online at http://www.cubicdirectmail.com/