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The Untold Story of Cash for Clunkers

We have all seen the gleeful look of the previously forlorn auto dealer in Topeka or Louisville, regaling the Cash for Clunker program.  And, assuredly, we are heartened by the swift action taken by Senator Reid and his Democrat colleagues to shore up the funding for this worthy endeavor.

But what is not told to the consumer of America’s Obama-frenzied media is the administrative disaster that is “Cash for Clunkers.”

In a word, it is a “nightmare.”

  • The final rule published 7/24 required that the engine to the trade-in be destroyed at the dealership (an upfront cost of not an inconsequential amount) and the vehicle hauled away (again, not an inconsequential expense), prior to the dealership even being able to submit a request (which may or may not be granted) for payment.
  • The initial appropriation of one billion dollars worked out to approximately 222,000 transactions, or perhaps 10-12 transactions per dealer nationwide.  It was not unusual, however, in the first three days of the program to have received 50 transactions at a single dealer.  To say the program was underfunded is the understatement of the year.
  • Even now, there’s a legitimate question whether the additional $2 billion will be sufficient to meet the expenses associated with existing requests for reimbursement, let alone additional requests in the days and weeks ahead.  Somehow this point has escaped Secretary LaHood’s explanations.  The existing rule reads that dealers will only be reimbursed to the point where the appropriation was exhausted – so don’t be surprised if there is an Appropriation No. 3.
  • The program is an administrative hell for dealerships, who are required to scan between 15 and 20 individual documents for each individual deal, then save them into 10 separate files and upload each file for every request.
  • Dealerships are submitting dozens of requests, beginning last Tuesday and still have not received a single approval.  Rejections, however, have been forthcoming.  With each rejection, the dealership has to correct the application and resubmit it – with such resubmissions now at the bottom of the request “pile.”
  • The “Help” line which has been made available to dealerships is anything but – simply stated, it’s very difficult, if not impossible, to get through.  Placed on hold for minutes at a time only to be disconnected and start the process all over again.

And, then there’s the whole name for the program – is “cash for clunkers” really a new program?  I could have sworn that it’s what used to be called “congressional pay.”

These guys want to run our healthcare system?  And, more than that, they want us to trust them to run our healthcare system?  Puhleeeeze.

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