Getting the federal money promised to dealers who have sold consumers discounted new vehicles in exchange for gas-guzzling trade-ins proved difficult, dealers said this week.
Under the program, consumers can trade-in certain guzzlers for new ones with better fuel economy in exchange for $3,500 to $4,500 in federal vouchers. But that money was to come in federal reimbursements to dealers, who discount new vehicles in qualifying deals and then must apply for the funds online. And some said until they could figure out the Web-based system, they have thousands of dollars unaccounted for.
Late today, several news organizations reported the Obama administration would suspend the program because of concerns it has already reached its $1 billion maximum funding level. The White House later denied the reports, and an administration official said more funds are being sought for the program.
The National Automobile Dealers Association concluded earlier today the initiative would outstrip its funding long before the Nov. 1 expiration date.
Chaos for dealers
Jerry Golinvaux, a Chrysler-Jeep-Dodge dealer in Roseville, Minn., said Wednesday afternoon he had submitted 35 deals so far and hadnt been notified that any of them have been approved.
Weve received two rejection notifications back, and the notifications dont give any indication of why they were rejected, he said.
Applying online for each reimbursement takes a minimum of 25 minutes, he said. And he hasnt had much luck getting help from the federal hotline, 866-227-7891.
You get hold of somebody after waiting an hour and a half, and that person doesn't know the answer, Golinvaux said. So they transfer you to somebody else. They transfer to somebody else, and then you get a dial tone.
Rae Tyson, a spokesman for the National Highway Traffic Safety Administration, said NHTSA staffers investigating hotline complaints did not have trouble getting through on the hotline.
There may be a wait, but we have significantly increased the staff for the hotline, so I reject any complaints about that, he said earlier this week.
He said Wednesday afternoon he was not aware of any hotline problems, although he had not tried to call that day. And NHTSA said this morning in a statement that 56,430 calls got through on its hotline on Tuesday, its most recent day of data.
But an Automotive News reporter who called the hotline multiple times Wednesday progressed through a series of four menus that twice informed callers of high-call volume, even saying you may be unable to get through to talk with someone about problems with the governments online system.
In the final menu, the reporter selected an option for a dealer to speak with an agent about submitting a voucher reimbursement request. Each time, the reporter received a busy signal after selecting that option.
Dealers also have complained that the cash-for-guzzlers Web site times out every 120 seconds while theyre trying to file a voucher application. Thats a security feature, Tyson said, and dealers need only hit any key to keep the window active.
Running out of cash?
It didn't take long for many dealers to conclude they would outsell the program quickly.
As of 4 p.m. ET Wednesday, dealers had submitted 22,782 deals worth $95.9 million in reimbursements, NHTSA said earlier today.
The NADA has been working with NHTSA to try to get payments for every auto dealer who has made a payment under the program, spokesman Bailey Wood said earlier today in an e-mail before reports of the suspension emerged.
The $95.9 million was the amount of money dealers have requested for reimbursement, Tyson said today.
That clarified a previous statement that the money was the amount approved for dealer payouts. Tyson said he did not know how long it would take for dealers to receive their payments. The governments www.cars.gov Web site says it will take about 10 days for voucher money to appear in dealers accounts after each request gets approved.
Brian Benstock, general manager of Paragon Honda in New York City, said he is moving more cautiously when selling vehicles under the program, since he isnt so sure when the government funding will run out.
He sold his first vehicle under the program at 10 a.m. July 1. Since then, he has sold about 60 and delivered 45 of those. Buyers who took delivery of their vehicles before the government issued its rules signed a release form stating they would sign additional paperwork if required by the government to quality for the rebate.
The rush of applications for reimbursements filed since Friday may not be an indication of the backlog of vehicles sold earlier in July, Benstock said.
I think the programs just that good, he said. I think its continued business. Its not slowing up for us.
Rick Case, owner of a 13-store dealership group based in Fort Lauderdale, Fla., said he has sold about 250 vehicles under the program since the July 4 weekend. Case said his customers signed agreements saying if for some reason they dont qualify for the program or the money runs out before the Nov. 1 expiration date, they will return the vehicle.
He said he believes that the rebate cash could run out before the program is set to end, but thats not an issue yet.
I think were going to be safe 'til the middle of August, Case said.
One dealers secret
Bill Wallace, owner of Wallace Automotive Group in Stuart, Fla., said Wednesday he had successfully submitted 60 applications for reimbursement, hopefully helping him get reimbursed while funding is still flush.
To get a jump on other dealerships, Wallaces employees get online to apply for the funds before 8 a.m. ET and as late as 9 p.m., when he thinks volume on the federal Web site will be low.
But I havent seen any money yet, Wallace said.
Tyson said Oracle, the software company that is handling the computer systems for NHTSA, says it can handle up to 14,000 dealer refund transactions at the same time.
Arlena Sawyers, Bradford Wernle and Neil Roland contributed to this report