CARS Program Proves Frustrating for Some Dealers

Despite the $2 billion in additional funding approved by Congress last week, some new car dealers are still waiting for their Cash for Clunkers reimbursements.

Nationwide, auto dealers are frustrated by the delays in reimbursements that are creating a bottle neck in the highly successful program. According to the Transportation Department, dealers have filed 338,659 requests for government reimbursements totaling $1.4 billion.

A recent Automotive News article highlighted the problem the delays are causing for dealers. The article spotlights a Southern California Toyota dealer who purports to have 450 unpaid CARS program vouchers totaling $1.9 million. He claims that of the 92 reimbursement claims he filed prior to August 2, only three have been paid.

Another new car dealer located in Salisbury, North Carolina reported 12 unpaid reimbursement claims that have been pending since August 1. The dealer told the publication that his out-of-pocket expenses total $47,000 and said, “I’ve never experienced anxiety like this in business before.”

According to the Department of Transportation (DOT), the entity charged with overseeing the CARS program, it has a staff of 225 people who review every application.

In addition to the frustration over delays in receiving reimbursements, many dealers also report that their applications have been rejected based on procedural errors. Some complained that they have been unable to rectify the errors because they were unable to reach the proper DOT personnel either by phone or email.

In a written statement issued on August 13, the National Automobile Dealers Association’s vice president for dealer operations, John Lyboldt said, “While problems with application submissions for the clunkers program have been significantly reduced, getting approval for dealer reimbursement requests is still facing significant hurdles.”

Lyboldt said his association is working in tandem with the National Highway Traffic Safety Administration to expedite claims processing to ensure that dealers receive their reimbursement payments in a timely manner.

He asserted that a number of posts on the program’s official Web site,, relating to vehicle delivery times and contingency agreements relating to sales transactions have added to the confusion being experienced by participating dealers.

He also cited the large amount of precise documentation dealers must provide the agency as a cause for many of the rejected applications.

“Resubmitted applications,” Lyboldt said, “are making a bad situation worse by adding to the backlog.” In a warning to participating dealers, he said, “It is critical that before submitting the paperwork to NHTSA that every dealer double and triple check that every ‘i’ is dotted and every ‘t’ is crossed.”

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