North Country Gazette



Wait To Buy New Car Under Cash For Clunkers

Posted on Wednesday, 1 of July , 2009 at 9:55 am

Consumers who were thinking about buying a new car under the Consumer Assistance Assistance Recycle and Save Act (CARS) would be smart to wait.

 

 

Under CARS, known as Cash for Clunkers, a government voucher of up to $4,500 will be available towards the purchase of a new fuel-efficient car if you trade in your own clunker.

 

 

 

This program, designed to boost car sales while getting gas guzzlers off the road was planned to start July 1 but consumers are advised to wait.

 

It’s only been 6 days since the bill was signed. 

 

Any car dealer that gives a consumer the CARS credit on a new car sales on July 1 runs the risk of complicating their reimbursement process. 

 

Here is the exact wording placed in the official CARS website, http://cars.gov:

 

“While the CARS Act makes transactions on and after July 1 potentially eligible for credits under the CARS program, interested dealers and consumers may want to wait until all of the detailed issues that must be addressed in the implementing regulations are resolved and the final rule is issued. Issuance will occur around July 23.

 

At that point, NHTSA will have in place detailed provisions about establishing eligibility and a system to ensure the prompt payment of money for credits used under the CARS program.

 

If dealer choose to structure a transaction before the final rule is issued, they will bear the risks associated with later demonstrating that the transaction meets all of the specifications of the final rule. The dealers should also give the credit to the consumer at the time of such transaction. 

 

The dealer would be reimbursed by NHTSA later if the dealer registers and submits documentation sufficient to demonstrate that the transaction was an eligible one, that the  traded in vehicle was properly disposed of, and that all requirements in the final rule were met.”

 

This is an excerpt from a PDF document from the official CARS website.

 

New Administrative Headaches For Car Dealers

 

Car dealers will benefit from the CARS program but they will also have many new headaches to deal with.  It would seem unlikely that car dealers will stick their neck out and sell cars starting July 1st without knowing all the rules.  Here are just a few new issues that the CARS program will hand dealers:

  • Compliance training to ensure that all papwerwork is collected from consumer.
  • Dealing with trade-ins that are not listed on http://fueleconomy.gov.
  • Storage of clunkers until payment is received, which could be up to 10 days.
  • Security to keep the “clunkers” from being vandalized.
  • Cashflow delays. The government will review each transaction and payment delays can be expected.
  • Dealing with transactions that the government does not approve.

http://www.cashforclunkersfacts.com/

http://www.northcountrygazette.org/2009/06/20/cash_for_clunkers/

 

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Category: Business, Consumers, Good News, Government, Nationwide

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