New Government Program is a Clunker

Customers are scrambling to take advantage of government money to buy new cars, and like most government programs the people who are supposed to get the money, in this case the car dealers, are scrambling to get paid:

Car dealers across the Twin Cities area reported busy showrooms and low inventories Tuesday as customers scrambled to unload their old gas guzzlers and save $3,500 or $4,500 on a new, more fuel-efficient car under the federal government's $1 billion Cash for Clunkers program.

At Morrie's Minnetonka Ford/Lincoln/Mercury, the receptionist started a waiting list for the finance department, the first time she ever had to do so. One dealership in Coon Rapids ran out of two of the eligible cars, the Jeep Patriot and Compass.

But dealers reported problems with the government's online system to get the transactions approved by the National Highway Traffic Safety Administration (NHTSA), which is running the program.

Scott Lambert, vice president of the Minnesota Auto Dealers Association, said he was "astounded" to learn at a meeting Tuesday representing about 150 Minnesota dealers that not one has had a deal approved.

"We had dealers representing 1,500 to 2,000 transactions," he said. "We asked how many had a deal approved yet, and not one hand went up."

Lambert said the government has created a program that's "so big and cumbersome that it can't find a way to accept anything. We're sending in good, reliable deals."

It's nerve-racking for the dealers, he said, because they have given the customer $4,500 and now the dealers need to be reimbursed.

Some dealerships, including Morrie's, are letting customers drive their cars home before the government OKs the deal. Morrie's general manager John Aretz said the customer can return the car if the deal is not approved.

It's nice to see car dealers getting some business, but if people have to start bringing cars back because the government payments aren't approved, it's gonna get ugly.