August 25, 2009 in Business

Red tape ends clunker sales early

Some dealers worried about filing papers on time; deadline extended
By The Spokesman-Review
 

Monday was the official last day to buy a car under the federal cash for clunkers program, but many Spokane-area auto dealers had already shut down the rebate plan over the weekend over concerns about getting their paperwork in on time.

Among the dealers who didn’t offer last-minute rebate deals Monday were Becker Buick, Pontiac and GMC, Wendle Motors and Downtown Honda.

Becker Buick Vice President Dale Cornwell said he told his dealership sales staff that the final day for their use of the program was Friday.

“We were worried we wouldn’t be able to do anything with the paperwork handling on Monday,” Cornwell said, referring to government deadlines for dealers to file for reimbursement.

Other dealers came to the same conclusion.

“We didn’t do any more (sales) after Friday,” said Wendle General Manager Shane Goff. “It became too much of a risk based on their timeline.”

Under the plan, dealers had to submit their clunker deals online before the Monday deadline. If they were late, they’d be on the hook for the sale and not receive the government rebate.

The dealers’ concerns were well-founded. By late Monday morning the U.S. Department of Transportation reported the flood of dealer submissions had crashed the Web site for filing the rebate forms, and the department moved the deadline to today.

Monday evening, the site said officials “have determined that the website will not be fully functional before tomorrow morning. 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 site promised an update today.

Ray Agnew, a sales manager at Downtown Honda, said the dealership shut down its final clunker sale Saturday afternoon.

A company staffer tried unsuccessfully Monday to submit the forms for that sale. “They were unable to do anything at all. The process has been fairly frustrating,” Agnew said.

Despite the frustration, Cornwell, Goff and other dealers said the rebate program pumped up sales and removed inefficient cars from the highways.

Under the program a buyer would save up to $4,500 depending on the improvement in fuel efficiency from their old vehicle to their new one.

Cornwell said Becker Buick sold 15 vehicles under the program, but he’s concerned about the impact on new-vehicle inventory.

“We’ll probably have a poor September and October. It did what it was supposed to do but it took so many units that I’m afraid we have just sold our inventory ahead of time,” he said.

Goff said Wendle sold probably about 100 vehicles. But he said the north Spokane dealership has plenty of inventory left.

Ken Smith, who runs the Dave Smith Motors dealership in Kellogg, said his company continued pushing the rebate program throughout Monday, despite the backlog in red tape and computer slowdowns.

“We’ve sold more than 260 vehicles so far,” Smith said. He said a customer was driving from Seattle to North Idaho on Monday afternoon to close a deal on a new truck before the deadline.

“It’s made August a very good month for us,” he said.


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