‘Clunkers’ program lurches to a close

The Cash for Clunkers program didn’t officially end until Monday night, but some local dealers gave

The Cash for Clunkers program didn’t officially end until Monday night, but some local dealers gave up days ago.

They ran low on fuel-efficient cars, couldn’t access the government Web site to submit their claims because the site crashed repeatedly, and became fearful that any more clunker deals they made might not get reimbursed.

At Mohawk Honda on State Street in Schenectady, the general manager decided Friday night to stop participating in the program.

Johnstown Dodge was essentially forced to follow suit — by Monday, it had just one car left in stock that would qualify for the biggest cash payment in the program.

But on Monday afternoon, Dodge sales staff were still willing to spend hours on paperwork to sell that last car. They were counting down the minutes at 4 p.m.

“If someone comes in right now, it will be two hours of real paperwork shuffling . . . but I’ll do it,” said dealership President George Kline. “If they come in an hour from now, I won’t have enough time.”

The $3 billion federal program was set to end at 8 p.m. Monday, although computer problems led the government to announce that paperwork could be filed through noon today. All sales still had to be completed by Monday night.

The Johnstown dealership sold 10 cars through the program, spending hours and sometimes weeks on submitting each claim. Not one claim has been approved yet.

“We haven’t been paid for a single car yet,” Kline said. “We don’t even have the vouchers. I’d feel more comfortable if I had the vouchers that I’d eventually see the money. A lot of dealers decided it was just too much paperwork. That’s why a lot of them have stopped participating.”

But Kline said he has no regrets for sticking with it, despite the fact that each sale took so long.

“For some of the people who came in, it was the first new car they ever had,” he said.

Few of his customers realized how difficult the purchase would be, he added.

“We’ve held cars for them — we had one person who finally turned in all the required documentation on Thursday,” he said. “Proof of ownership, registration, insurance, there’s 13 things you need to have. I just say to people, ‘this is the government we’re dealing with. Please, please have patience.’ But we’re a nation of people who want instant gratification.”

Meanwhile, The Associated Press reported Monday that dealers were still struggling to finalize all the deals they’ve made. The federal computers set up to handle the filings buckled under a flood of dealers trying to send in their sales agreements at the last minute. Under the original plan, those deals that weren’t submitted on time wouldn’t be repaid, leaving many dealers fearful that they would be left on the hook for clunker sales they made.

“The computer system has been down or very slow for most of this day, and we literally have thousands of dealers with probably millions of deals that they would like to submit and just have been unable to,” said Michael Harrington, chief legislative counsel for the National Automobile Dealers Association.

Computer problems have plagued the program, as it proved far more popular than government officials expected. A rush of filings also bombarded the online system earlier this month when it appeared the first $1 billion Congress set aside would run out just days after sales began. Transportation officials later expanded the computer network capacity and tripled the number of staffers working on the program.

The big rush of filings on Monday, however, shut down the filing system temporarily, prompting auto dealers to push for the extension that they received late Monday.

“We’ve spent the better part of the last three days trying to hack our way into their computer program that has been down more than it’s been up,” said Alan Starling, who owns two General Motors dealerships in central Florida. His staff was still trying to submit all the paperwork for 75 deals through the clunkers program.

Transportation Secretary Ray LaHood, speaking to reporters in Norristown, Pa., earlier in the day, said the program was an unprecedented success and a boon for car dealers, automakers, scrap yards and financial institutions.

He estimated that by the sales deadline later Monday, “there will be 700,000 to 800,000 cars that have been sold, most of them fuel efficient,” replacing gas-guzzling cars and trucks.

Transportation officials said that, through early Monday, dealers had submitted 625,000 vouchers totaling $2.58 billion. Many car dealerships have worked overnight in recent days to submit the 13-page application to be reimbursed for the trade-in vehicle, including the title, proof of registration and proof of insurance.

Dealers have only received a fraction of the reimbursement funding. Through last Thursday, the most recent data available, the Transportation Department had reviewed and processed more than 150,000 reimbursement applications and approved $140 million in payments to dealers. At the time, DOT had processed about 30 percent of all the applications they had received.

The $3 billion Cash for Clunkers rebate program has been wildly successful in spurring new-car sales and getting gas-guzzling models off the road, though some energy experts have said the pollution reduction is too small to be cost-effective. Customers receive rebates of between $3,500 and $4,500, depending on the improvement in fuel efficiency from their old vehicle to their new one.

Categories: Schenectady County

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