Dealers scramble to beat 'cash for clunkers' deadline
The U.S. House Friday voted to inject another $2 billion into the "cash for clunkers" program after it ran out of money in just a week.
The program gives consumers up to $4,500 to trade in a vehicle with low fuel efficiency for a more efficient one. A similar Senate bill ramping up funding could come as early as next week.
Meanwhile, Minnesota auto dealers operated with the understanding that any deals signed by the end of the day Friday could go through, and they struggled with the paperwork to finish those deals.
Reports swirled last night that car dealerships had lines out the door because customers didn't know when the cash for clunkers program would end.
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The incentive program offers consumers up to $4,500 to trade in gas guzzlers for more fuel efficient vehicles. Trade-ins cannot be older than 25 years or get more than 18 miles per gallon in most cases.
Friday at Fury Motors in South St. Paul, the clamor had died down. But for owner Jim Leonard, things were the opposite of quiet.
"Chaos. I don't know if there's another word to sum it up other than chaos," Leonard said.
Jim and his brother, co-owner Tom Leonard, have fielded calls from a lot of angry customers who had wanted to pursue the cash for clunkers program but now feel shut out. The program was expected to last through October.
And the Leonards were grappling with an extremely buggy, government-run Web site, where they were supposed to enter their 100 cash-for-clunkers transactions.
Only one computer can be logged on at a time. Tom Leonard sat bleary-eyed in front of it entering data until midnight and came back early this morning for more.
"It will let us in but it won't let us through," said Tom Leonard.
The problem, he said, is that the program freezes up. And then, because it's on a timer, it kicks him off. But Tom said he never knows how long the timer is set for; there's no visible clock.
"Sometimes it's two minutes, sometimes it's 25 minutes," Tom Leonard said. "You don't know."
Either way, when the timer runs out, Tom has to start over. A typical entry ends often ends up taking an hour.
"And we have 100 of them," he said. "So we have 100 hours, if you were to work 24 hours a day."
The Minnesota Automobile Dealers Association said dealers around the state have been reporting similar problems.
It's not just the fatigue of data entry either. Tom Leonard said they're worried about customers' deals not going through because of the Web site's glitches. That's bad for customers and bad for them; they need to get reimbursed by the government to the tune of a $500,000.
As of midday Friday, none of the Leonards' deals has been accepted. The state's auto dealer association knows of only two that have gone through out of an estimated 3,500 cash-for-clunkers transactions in Minnesotas.
But as Tom waits while processing an entry, he might miss the cash register ringing outside, where two happy customers sit beaming in the showroom.
Tama and Steve Modika came here to Fury Motors a couple days ago to trade in their old Ford Taurus. They got the voucher for the cash for clunkers program and the dealer kicked in money.
"We thought, it's only worth $2,000 bluebook, we have to do this," said Steve Modika. "It just makes a lot of sense. We came here and got $8,000 dollars for our Taurus and we bought a Jeep Patriot that gets better fuel economy."
And in negotiating with the dealership over the cash for clunkers program, the Modikas found out they could get a good deal trading in a truck. So they returned to get a second vehicle.
"We're getting a van now," said Steve Modika.
The Modikas said they're not worried about their cash-for-clunkers deal going through. Dealers are required to immediately disable the vehicles, but the Modikas say they were assured that hadn't happened yet, so they figured they could still get it back if the transaction got scuttled.
Scott Lambert of the Minnesota Automobile Dealers Association said dealers are appealing the rule about destroying the trade-in right away. He said it's not practical considering the timeline to get transactions approved.
Lambert is still upbeat about the cash for clunkers program, despite all the confusion and complications it's creating.
"Everyone was very excited, it was a great incentive, you could tell there was a lot of customer anticipation over it," Lambert said. "That all worked."
But, he said, no one knew how hard it would be for dealers to get reimbursed.
Which brings us back to Tom Leonard at his computer, where after 20 minutes of trying to upload the necessary information, his session crashed again.
Tom and Jim Leonard say, despite all the technical problems, customers interested in cash for clunkers should still come in and negotiate a deal. That's especially true if more money from Congress arrives next week.
