Cash for Clunkers runs out of gas

From Staff and Wire Reports

The Transportation Department is assuring auto dealers they will get time to submit their pending Cash for Clunker deals, as continued problems with the government's Web site make it difficult for dealers to file for repayment under the popular $3 billion government rebate program.

All sales under the program ended Monday evening. The deadline for paperwork to be submitted was pushed back to noon Tuesday from an earlier 8 p.m. EDT Monday cutoff after government computers set up to handle the filings buckled under a flood of dealers trying to send in their sales agreements at the last minute.

"We worked very hard and did things a little different from other dealers," Dean Swindler, business development and Internet manager at Rowe Auburn said Monday night. "We found out about all the problems that other dealers were having and then made sure we were on top of it."

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. However, it now appears that the deadline could be pushed back again.

And while some dealers buckled under the stress of a crashing government Web site and potential loss of tens of thousands of dollars in reimbursements, Swindler was cool as a cucumber. He wasn't looking forward to waiting on the website to get back up and running after the dealership doors closed at 8 p.m., but also wasn't facing a mountain of cumbersome paperwork.

Swindler said that of the roughly 140 cars sold in the last month under the government program, Rowe Auburn had only nine sets of paperwork that had not yet been submitted. And all of those nine were from the final day of the program. Swindler said he worked 94 hours the first week of the program - staying well into the night to submit forms on the Web site, double check numbers and verify information. He averaged more than 80 hours per week after the initial week.

"We continue to address technical problems with the CARS website, and have determined that the website will not be fully functional before (Tuesday) morning," the Transportation Department said in a statement sent to dealers late Monday evening. "Dealers should be assured that they will be provided time to submit pending deals equivalent to the time that was lost this afternoon while the system was down."

The DOT declined to elaborate further.

"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 dollars of deals that they would like to submit and just have been unable to," Michael Harrington, chief legislative counsel for the National Automobile Dealers Association, said earlier Monday.

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 its 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 an extension.

"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 clunker program.

Locally, Rowe Auburn general sales manager Jake Anderson called the program a "blessing" for the business, even though only about 30 percent of the last month's sales fell under the Cash for Clunker category. He credited Swindler with helping the dealership stay on top of its paperwork, and keeping it from having a backlog of submissions.

"We have a very positive outlook, and we've ordered cars to replace the cars we've sold in the last month," Anderson said.

Anderson said that the two most popular replacement cars for people trading in clunkers in Auburn were the Ford Focus and the Hyundai Elantra. He said that the average cost for either model was between $10,000 and $11,000. And some buyers left the lot paying less than $10,000 for a new vehicle.

Transportation Secretary Ray LaHood, speaking to reporters in Norristown, Pa., earlier Monday, 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.

Cash for Clunkers 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.