Was Your Cash For Clunkers Deal Rejected After Being Approved?
Edmunds.com, the car info website, is asking people who participated in the short-lived Cash for Clunkers program to contact them if something went wrong. Although they can't fix any problems, they're trying to collect data on consumers who are being asked to pay back the government rebate after already being approved, which was forbidden under the rules of the program, so they can present the data to the National Highway Traffic Safety Administration.
The problem comes from dealers who improperly authorized rebates, in some cases because of unnoticed state regulations that would invalidate an application.
Asking for repayment if the rebate is rejected is something dealers are not allowed to do, says Lena Pons, policy analyst for Public Citizen.
"The onus was on the dealer to verify the paperwork before they completed the transaction," says Pons. "Many people would not have gone through that process if they knew they were going to be on the hook for additional money."
And Pons says the government needs to do more to ensure consumers aren't defrauded - for example, by being asked by a dealer to repay a rebate that the government had approved and paid.
"There's a large number of sources of fraud we're concerned about, and we're trying to gather information on that," she says.
If you were denied a rebate, particularly after already being approved, you can share you story with Edmunds by visiting this page, where you can post to their forum or email them directly.
"Were you wrongly denied your CARS (i.e., Cash for Clunkers) rebate?" [Edmunds.com]
"Consumer groups try to protect buyers in clunker deals" [USAToday]
(Photo: Arnoooo)
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Comments:
Damn, that's just grimy. Dealerships trying to double their CARS profit because they damn well know they won't even sell half the amount of cars in the next 12 months they did during the rebate period!
@bloggerX: Umm, and when did you expect any car dealership to be honest? Really. Try being a woman and walking into any car-related business. Even if you know your stuff you have to be incredibly careful.
It would not surprise me in the least if the majority of dealerships were pulling this crap.
@AshCatScram:
I don't think it's gender related. Most people leave a dealership feeling as if they've been ripped off.
My brother in law still doesn't have his car.
He signed the deal at the beginning of August and he is still driving his clunker.
Looked at the comments on Edmunds and a lot of them are saying/admitting that they were late registering their vehicles.
The rules, in black and white said, 'Trade-in vehicles must be registered and insured continuously for the full year preceding the trade-in.'
Unfortunately, the (really any type) government sucks with black and white rules. But without set standards, what would be 'fair'.
This story needs to be on every news broadcast coast-to-coast.
Every person who bought a new car through this program needs to know that they cannot be held to pay the dealership when the rebate doesn't fly through.
I see this spiraling out of control otherwise.
@tbax929: Ripped off is a G-rated way of putting it...heh.
That being said, my dealership has a strict no-haggling rule, of which I am a HUGE fan. Their prices are good, and you know that you didn't get a better or worse deal than Joe Shmoe who came in after you. Their salesmen also don't work on commission, which makes a huge difference in how you're treated. In a good way.
@sven.kirk: The issue at ahnd isn't that they didn't qualify, it's that the dealer sold them a car under the program because they didn't check first to make sure the buyer qualified for it - and is now asking for that money back, which is not allowed under the terms of the program.
I see dealerships simply making an "adjustment" to the principle balance of the vehicle loan and forcing the customer to fight it, instead of the other way around.
@starrion:
This is illegal. The dealers HAD to take possession of the "clunker" at the time of sale in order to apply for the rebate. If they are applying before giving him his new car or taking the clunker, they broke the law.
Your brother in law should go to the web site for this and do some research. The dealer is screwing him.
From the article:
"The issue is that the regulations that were written were incredibly cumbersome," says Jeremy Anwyl, CEO of Edmunds.com. "There are cases where people unequivocally lived up to the law, but they are having a hard time living up to the regulations."
Seems like there is more blame to go around.
I would like to see a dealer try this. If I have signed paperwork in my hand that shows the price of the car and it is "adjusted" after sale, my lawyer would be on the phone with the dealer by sunset the same day.
I agree with zacox.
1. Dealers had to take the clunkers when the deal was done or they were breaking the laws concerning to the program. They can't make you wait for your car.
2. Dealers can not make you repay the rebate if they don't get paid. Again, illegal.
What consumer would let a dealer get away with this?
Also, I need to add that I had no sympathy for a dealer crying on TV because they did not get their money from the rebate from the goverment in a week or two. HELLO? Americans wait a few months for their income tax refunds in some cases. What makes dealers think they deserve instant turn around???
@henrygates: Unless the dealership has financed the vehicle through their own lending firm, it isn't possible for them to do this. The bank will have approved the loan under the terms agreed upon in the contract they were sent; dealerships cannot change that without getting everything resigned by the customer.
I've worked in a car dealership's accounting office for five years and have seen some crazy shit, but NEVER something like that.
@bloggerX: "Profit" and "money they received from the government" are entirely different things. I work at a dealership and am the only person there who's had anything to do with submitting CARS deals to the gov't. For most of these deals, there was no "profit" to speak of. Add to that the interest we're LOSING because we don't have the clunker money in the bank and it's not that great a proposition for us on the front end of things.
@Nogard13: It seems dumb. These dealers are going to be hung out to dry if they get caught doing this. It's sad that criminals think they can get away with crap like this.
@PLATTWORX: Big whoop. Now the real issue is going to be if they try to con him once the rebate goes through. Which they will most likely do. They will claim the rebate was lower than it really was or say the new car was unavailable but a "similar" car is available that conveniently has "upgrades" that cost extra.
I wonder is republicans are going to continue to side with car dealerships against being closed after a bunch get caught committing fraud.
Everyone is saying that the dealers can't force people to pay up if they don't get reimbursed. But a while back, there was a story about the dealers requiring people to sign a form saying that the buyer would pay up if the government didn't come through. So my question is - does that become one of those unenforceable contracts, or is it one of those you signed it, you're on the hook for it?
@Nogard13: From what I've gathered, the dealerships doing this are doing so because they got denied on the goverment paperwork side. You're trying to tell me that a dealership isnt clear on the rules beforehand *and* after the fact?
The dealerships that did their homework aren't complaining at all. I have no pity for those that tried to capitalize on the popularity without RTFM-ing.
@akiri: How would where the financing came from have anything to do with it? A signed contract is a signed contract. I agree to pay back X amount, period. Doesn't matter if it's Chase or GMAC or Autoway.
Typical government screwup as we used to say SNAFU, which usually fits any government program. Why are the dealers esp. the ones who did it right having to wait for appropriations, when the government said the appropriations
were there from the start. As stated in the Sunday paper and on the internet news that only 500 million has been sent out so far of the 3 billion supposedly appropriated for the cash for clunkers.... Dealers have not had a good year and are strapped for cash, understandably they are angry, But to take it out on the consumer is wrong also. We all went into this with the idea that the government would do the right thing, apparently they are not doing the right thing.. and getting the money to dealers as they told them they would do from the start.
@maruawe42: But from what I understand the government IS getting the money back to the dealers who checked to see if the consumer actually qualified for the upgrade.
Sorry but the government is not to blame if a dealer tries to blanket approve every consumer, promise them a rebate, and then find out that only 20% of those consumers qualified; that sounds like a dealer issue to me.
@PLATTWORX: I hadn't stopped to think about it but I do agree with your last paragraph. I'm not sure if a timeline was established in the cash for clunkers program but why would they expect money in two weeks when two months seems to be the norm?
@maruawe42: Awesome, a blame-the-government post and it's not even noon.
This is very the government's fault. From day 1, it was made clear that the dealers are responsible for checking that the paperwork went through, and that the dealers are responsible for the rebate if it does not clear. This isn't about funding or lack thereof - the dealers not getting the rebates are (at least in this case) the ones who submitted incorrect/unqualified paperwork. The end.
I recall there was someone who sold cars for a living decrying the horrible, horrible policies the government put in place to ensure consumers weren't hoodwinked by dealers. He seemed offended (the nerve!) that the program didn't take car salesmen at their word. He was soundly beaten down in the comments, thankfully.
I wouldn't be against a follow-up law stating that when dealers are caught playing fast-and-loose with the Cash for Clunkers paperwork to goose their sales, the dealers are explicitly made to be on the hook for their slimy tactics. Or even better, that they're held personally responsible.
@akiri: If your firm can't pull in profits even with taxpayers throwing many thousands of dollars at you, perhaps you shouldn't be in business?
Here's me playing the world's smallest violin. I know you can't see it, but whatever. I know car dealers are hurting. But karma being what it is, this serves them right for years of duping consumers into loans that are too long, interest rates that are too high, confusing contracts, 4-square negotiations, pennies-on-the-dollar trade-in values, etc, etc.
@Nogard13: Shut the fuck up Donny, you're all out of your element...
A dealership would have to be plain retarded to try and ask for the money already paid to them by the government. One it's a felony, two they know it's a $15,000 fine if caught per customer.
I know nobody here at the consumerist will belive this, it's shocking I know, but the clerical portion of C4C is completely broken and hackneyed. The government is also looking for every and any reason to deny rebates, you were a day late on renewing your registration? DENIED. You made a late payment on your insurance and they marked it in their system as no longer covered? DENIED. Clerical error on your title? DENIED.
We have had perfectly submitted claims denied because someone, somewhere, be it at a DMV in another state, or an insurance company spelled someone's name wrong once or put in the wrong address come back DENIED. Granted we got to resubmit some as I think the NHTSA realised someone was being a bit heavy handed. But this is a reality, and the more the Edmunds dot communists rattle their sabers, the less likely any dealer will ever participate in any future program, meaning even if they offer it again, few will be able to use the program due to lack of dealers willing to eat several thousand dollars again.
...OK, so here's a simple solution for C4C deals that got denied because the dealer either didn't do something right, or didn't catch something that would invalidate it (ultimately, it was the dealer's responsibility to ensure that the buyer qualified for the deal, and that all the paperwork etc. was done correctly).
Give the buyer back their trade-in, take the new car back, and nullify the purchase.
What, you already sent the clunker off for scrap? OK, Mr. Dealer, that's you're problem - eat the C4C rebate.
Otherwise, if the trade-in is still around, the buyer can get back to the same position they were in before this started by giving them their clunker back, and wiping the purchase away.
@mazzic1083: Because we were told 10 working days MAX.
You try running a business where your clients are taking 10 times longer than agreed upon to pay up.
It's not about feelings, it's not about anything more than dealerships are a business, not a public utility or service and need income to opperate.
@Trai_Dep: They are held personally responsible. Our salespeople and finance managers had to sign perjury forms that said jailtime and a fine if caught trying to game the system or the dealership and customer.
All you I hate dealerships crybabies seem to think there is a national cabal of dealerships all in cahoots to rip you and the guberment off.
In reality, as mentioned before, their system is not perfect and the rules seemed to change on a weekly basis. Again as was pointed out, the people on edmunds are admitting to trying to sneak their car through knowing they had lapses in registration or insurance and without spending a couple days to sit down and pour over the last 365 days on each and every car taken in some will get through the first filter and be caught by the NHTSA.
@akiri:
@Akiri:
Then don't make the deal. No one forced you to sell the cars. Please don't act like you did the buyers a favor.
@Corporate_guy: sorry, can't happen.
the rebate can't change it was $3,500 or $4,500 all depending on MPG ratings as new.
If there's a dealer that tries this let them burn in hell.
@Trai_Dep: how can you pull in profit when $4,000 is left unpaid on every deal?
reading comprehension, catch the fever!
@YouDidWhatNow?: That's what should happen. And what will in many cases.
Dealers were explicitly told to not destroy a vehicle until the funds have been approved.
And while the dealers are on the hook to VERIFY the info, if the customer lies about being eligible, they still lied...
@KingPsyz here for HappyFunKingPsyz©:
It's not scamming the dealer if the onus is on them to be certain that the buyer is qualified and to make sure all the paperwork is correct.
@katstermonster:
That would be a nice way to shop. I always take my car-salesman brother with me, and I still leave feeling as if I could've done better.
@subtlefrog: Very good question. I don't know, because thankfully my sister-in-law is smart and refused to sign that form. She did bring a copy of it home to show us, though, and yup, they tried to put her on the hook for it. Apparently she had to threaten to call the news before they backed down.
I figured that some dealers would skim the best $3500+ or $4500+ value clunkers off the top by giving the owner up to the $3500 or $4500 C4C trade inrebate and then turn around and sell the "clunker" for more than the $3500/$4500 value given. That also gives the dealer more incentive to "deny" the C4C trade and work the owner down on the trade pricing.
Dealer phone call:
"Oops, sorry your paperwork wasn't complete so we will only give you $2000 for your 1999 Ford Explorer 4x4. No, we still don't have the vehicle as it was scrapped. You drove by yesterday? No, that wasn't your Explorer with the $6,000 windshield price which you saw being chained to another Explorer by a group of Mexican citizens to drive to Mexico as an export. Thank you, bye"
@doctor_cos: The point is that the dealership wouldn't have the ability to violate the contract in the first place if the financing is via any 3rd party. As far as I know, the only dealerships who carry notes directly are the "note-lot" used-car dealers advertising "your paycheck is your credit" deals, so once the paperwork is submitted to the lender I'm guessing this situation would almost never arise.
@subtlefrog: In general, a contract is invalid if it involves the promise or threat of something illegal. If in fact there is language in the c4c law that says it's illegal for the dealership to pursue the customer to retrieve the rebate, such a contract probably couldn't be enforced. (I'm not a lawyer and haven't read the c4c regs.)
@KingPsyz here for HappyFunKingPsyz©: ...two they know it's a $15,000 fine if caught per customer.
And there you trip yourself up--on two words: "if caught". Forty-five hundred dollars vs. the remote chance of getting caught is powerful incentive for some, especially if the customer is pressured/hoodwinked/coerced into buying the fake "you're still on the hook" argument.
...and the more the Edmunds dot communists rattle their sabers...
And there you completely lost me. Isn't there a healthcare town hall somewhere you should be disrupting?
@WraithSama: Waiting for those "A CONTRACT IS A CONTRACT" denizens of Consumerist to eat a piping-hot serving of crow, now that the contract benefits the consumer in this case.
@KingPsyz here for HappyFunKingPsyz©: The dealerships need reading comprehension, I think. Or is a contract not a contract when it applies to the car dealer?
its okay, I knew uncle sam was a fly fisherman.
pretty good at it, too.
@KingPsyz here for HappyFunKingPsyz©: For the dealerships that obeyed the rules, they got the $4,000. For the ones trying to pull a fast one (or charitably, decided to roll the dice), they're encountering problems. And rather than owning up to dealer incompetence, they're trying to make trusting consumers swallow the loss that's the fault of car dealers.
You guys aren't looking a gift horse in the mouth, you're ripping its jaw out and waving it around angrily.
Oh, and you're welcome for our giving you guys a couple billion to goose your lot sales.
@KingPsyz here for HappyFunKingPsyz©: If 10 days were promised by the government than, yes, I would agree that that is a SNAFU.
I would be pissed if I was told that 10 days max would be the norm and instead it's taken 2 months.
That's pretty shady of the part of the stealerships to try to get that money back, even though it was forbiden to them to do so.
But, then again, that's par for the course.