Cash for Clunkers Starts July 23rd…

Thursday, July 16th, 2009

…but some dealers and consumers have ants in their pants.

According to media reports, the cash for clunker rules will not be finalized until the end of July. Consumers are cautioned to wait until the NHTSA* finalizes rules and dealer registration as cars purchased prior to that date may end up not qualifying for the program. The US Department of Transportation is advising dealers not to sell cars under the cash for clunker program until after July 23rd.

However, dealers and automotive manufacturers–fearing that program funds will run out by Labor Day– are not interested in waiting.  Hyundai is providing cash advances to dealers to fund the cash for clunker program until the government finalizes the details. Individual car dealerships are also honoring the cash for clunker program before the fact.

To date no dealers are officially enrolled in the program and consumers may be taking a risk if the dealer they purchase from does not later qualify under conditions set by the CARS Act. Consumers should also be aware that dealers must be licensed in their state to sell new automobiles in order to participate as Cash for Clunkers dealers.  Further, with more than 20,000 dealers attempting to register as a cash for clunker dealer, there are concerns that the government will be unable to register all the dealerships in time.

Despite the implementation delay, dealers are selling new vehicles to consumers and granting cash for clunker credits. Because the program runs for such a short period of time and with experts anticipating that cash for clunker funds will be exhausted by Labor Day, dealers don’t want to miss out. Besides accepting cash for clunker trade-ins, industry representatives are also pushing for a program extension according to US News & World Reports. No doubt a push for additional funding will also occur.

Consumers who don’t want to wait until July 23rd should at least verify that the dealership they are working with is licensed and actively pursuing cash for clunker participation. They should also read the fine print carefully and understand their financial liability should the dealer be unable to obtain the cash for clunker refund from the government for the purchase of their new vehicle. Be on the lookout for repayment requirements or other penalties.

Remember, cash for clunker dealers are prohibited from charging consumers handling or service fees related to the CARS Act.  Check all paperwork for hidden fees and report violations to the US Department of Transportation.

*NHTSA= National Highway Traffic Safety Administration

photo credit:baisieb

Tags: cash for clunker deadlines, cash for clunker dealers
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