A dealer I know had an interesting idea: When Congress renews the cash-for-clunkers program, why not let the automakers administer it?
Last week, my friends dealerships experienced all of the same horror stories that weve heard so many times from dealers across the country. They ran the gamut from delays in getting registered to issues with the paperwork. Thats what prompted the idea to let the manufacturers do it.
My friend is no factory toady. Hed be the first to tell you all of the things about selling cars that the factory guys just dont seem to be able to figure out.
But his logic is flawless. Manufacturers know how to administer an incentive program, including how to audit it. We always get paid, he said.
For sure the automakers could do a better job than NHTSA has done so far.
The bureaucracy at NHTSA, which is used to the leisurely pace of making safety regulations, had to administer a program with 136 pages of rules.
No-one at NHTSA -- or anywhere else in Washington for that matter -- could see the pent-up demand among consumers anxious to buy a new car. It turned out that the government incentive was all they needed
Another surprise in Washington was how geeked dealers were to sell cars, in spite of the all the red tape, including 136 pages of rules and regulations. Like any other incentive, dealers figured out to game the cash-for-clunkers program. The lag between when the bill was passed and when it took effect allowed some dealers to have dozens of deals ready to book as soon as the rules became final.
The real proof of how well the government manages the cash-for-clunkers program will come months from now. If there is a slew of federal fraud prosecutions because cars that supposedly were destroyed end up in Mexico with a freshly laundered title well know that the bureaucracy and the 136 pages of rules didnt work.
Federal fraud prosecutions burn time and tax dollars and might not even end with a conviction.
Thats why factories just use chargebacks.