Cash-For-Clunkers Kicks Off; Dealers Grumble About Registration, Requirements

July 27, 2009

Today marks the official start of the federal government's cash-for-clunkers program (sometimes referred to as the "Car Allowance Rebate System" and sometimes as the "Consumer Assistance to Recycle and Save" program, both of which cleverly spell "CARS"). On Friday, we mentioned that a set of preliminary rules for the program had been released, and not long after, a final version was made available at the government's CARS.gov website.

We've known many of the program's basic details for months -- since it first appeared as a bill in congress last spring -- so most of the final document comes as no surprise. However, the feds have made a few interesting tweaks to the details, including the requirement that dealers are now responsible for disabling the engines of all trade-in clunkers (since engines are on the short list of clunker parts that can't be salvaged).

According to the regulations, dealers are obligated to drain a clunker's oil and flush out the engine with a 40% solution of sodium silicate, which ought to do the trick. The National Automobile Dealers Association has complained about that stipulation, arguing that the dealers themselves shouldn't be responsible for disabling engines, but if they absolutely must, they ought to be compensated for their time and supplies. Officials at the National Highway Traffic Safety Administration, who oversee the program, insist that having dealers disable engines provides the least opportunity for fraud -- fraud being a very valid concern in such a sprawling, bureaucratic program as this. The cost of disabling the engines shouldn't run more than $30 according to the NHTSA, implying that the dealers might just have to take the hit on that.

The dealers' other major complaint is registration for the CARS program. According to an NHTSA spokesperson, over 1,700 dealers have been approved for participation as of today, and another 2100 are pending. (A total of 148 had been rejected by the agency.) The preapproved figures likely would've been higher, but crashes of the CARS registration website have been rampant -- something you might expect with 20,000 dealers all trying to sign up at the same time.

If you're a buyer or a dealer with a good Cash-for-Clunkers story, drop us a line, or leave us a comment. We're great listeners.

[DetNews; AutoNews, sub req'd]

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