The U.S. government -- facing dealer concerns about bottlenecks in the new cash-for-guzzlers reimbursement system -- approved about 1 percent of the programs funds as of Tuesday morning for distribution to dealers, a federal spokesman says.
Outside contractors had processed 4,026 cash-for-guzzlers deals as of this morning, approving about $17 million in voucher reimbursements to dealers, said Rae Tyson, a spokesman for the National Highway Traffic Safety Administration.
Dealers who have completed dozens of deals and are worrying about the program running out of its $1 billion in funding before the Nov. 1 deadline shouldnt be anxious, Tyson said.
I think its an unfounded concern, he said. It looks to me like we have a long ways to go.
The law, which gives consumers $3,500 to $4,500 vouchers for trading in some gas-guzzling cars for new ones with better fuel efficiency, had permitted dealers to start completing qualifying deals on July 1. But dealers could not register for the program or apply for voucher reimbursements until Friday.
Some dealers say that applying for the rebate so far is next to impossible.
They also say that given the time and stipulations it takes to apply for the rebate money, thousands more vehicles could be delivered under the program than for which there is money.
I have over $300,000 outstanding, says Gordon Stewart, who owns Chevrolet and Toyota dealerships in Michigan, Florida, Alabama and Georgia. Stewart has sold close to 80 vehicles to customers under the program. Despite many efforts, his staff has been successful in applying for rebates on only three sales.
Contractors from financial services firm Citigroup processed around 1,100 or 1,200 reimbursement applications Monday, Tyson said.
They are just working their way up to speed, he said. I think once they get the process down pat, the pace will pick up.
Still, we dont have a huge backlog, Tyson said, although he said he did not know how many reimbursement applications were waiting in line for approval.
NHTSA has estimated the program will cover about 250,000 deals. The cash-for-guzzlers law permits NHTSA to use $50 million of the $1 billion for administration expenses.
Eventually, the registered dealers Web site will address concerns about dwindling funds through a ticker that shows how much money is remaining, Tyson said.
The dealers will have access to real-time accounting, he said.
More than 20,500 dealers had applied to register for the program as of this morning, Tyson said.
Tyson said dealers needing help should call the hotline at (866) 227-7891.
We've added extra staff to the hotline, and we've called there multiple times and not had trouble getting through, Tyson said.
There may be a wait, but we have significantly increased the staff for the hotline, so I reject any complaints about that.
We pick up the phone and call and get right through.
Tyson acknowledged he has heard several complaints from people unable to get through on the hotline.
Dealers scrambling to submit transactions so they can be the first to access the program money should keep in mind that the program rules say rejected applications that are corrected and resubmitted will go to the end of the line for approval.
Fuel-economy ratings changes
Some of the dealers who tried to get a head start by completing cash-for-guzzlers deals earlier this month may find themselves losing out.
The Environmental Protection Agency appears to have corrected some of the fuel-economy ratings on its site, according to auto information site Edmunds.com. Edmunds.com said in a statement it learned of the changes from consumers who had checked their vehicles on the EPA site both before and after the NHTSA programs official launch.
Every day from 07/18/2009 thru 07/23/2009 the Web page showed that our car was eligible at 18 mpg. Now on 07/24/2009 it is listed at 19 mpg -- brilliant, one consumer wrote on an Edmunds.com online forum. That person was hoping to trade in a 1993 Toyota Camry wagon with a V-6 engine. We were ready to purchase a new car this weekend. But it will not happen now.
NHTSA is evaluating what to do about dealers who had already accepted trade-ins whose fuel-economy ratings had changed, Tyson said, but the agency offers dealers no guarantees.
Weve been saying from the outset that the program would officially begin on July 24th when the regulations were announced and that any dealer who chose to do a transaction between July 1 and July 24 was doing so at his or her own peril, Tyson said.
Dealers who had not completed cash-for-guzzlers deals before July 24 should use the current EPA ratings, he said.
While some dealers are scrambling to submit paperwork to receive their vouchers, others have had problems registering.
Some merely filled out the forms without pressing the submit button and will not get confirmation e-mails until they correct that mistake, NHTSA spokeswoman Patricia Swift-Oladeinde said. Those who did not register separate franchises with separate e-mail addresses should receive error messages via e-mail.
They will have to fix it, Swift-Oladeinde said.
She said dealers who have not received letters in the mail with an access code for registering need to call the federal hotline.
Arlena Sawyers contributed to this story