Cash for Clunkers runs into problemsLocal car dealers are running into problems with a federal government program called “Cash for Clunkers.”
By: By Rebecca Anderson, Intern Reporter and Don Davis, State Capitol Bureau, Alexandria Echo Press
Local car dealers are running into problems with a federal government program called “Cash for Clunkers.”
“Cash for Clunkers” or the “Car Allowance Rebate System” (CARS) is supposed to allow customers to trade in their old gas-guzzling “clunker” cars and receive a $3,500 to $4,500 credit toward the purchase of a new car with a sticker price of less than $45,000, and a combined city/highway mileage rating of 18 miles per gallon or higher for passenger cars (trucks have different miles-per-gallon standards).
One issue that Minnesotans are having with the program is simply due to a difference in laws.
The CARS Act states that in order to be eligible for the program, the “clunker” must have been continuously registered, but Minnesota law considers a registration to continue up to 10 days after the expiration date.
This quirk is affecting about 20 percent of the 7,500 Minnesotans who have applied for the program. Senator Amy Klobuchar, D-Minn., has spoken to U.S. Transportation Secretary Ray LaHood and said that the problem is being fixed.
Getting the correct paperwork filed has also proven to be a hassle.
According to Bumper Lee, owner of Lee Motors in Alexandria, the rules of the program are 137 pages long and the applications are 20 pages.
Both Juettner Motors of Alexandria and Lee Motors said that aspects of the program have been “very frustrating.” Both dealers have had problems filing the paperwork and contacting officials for questions regarding the program. And both state that the government website often crashes due to the sheer volume of traffic on the site. Klobuchar is also working with LaHood to fix the site’s glitches. The program has received mixed responses in terms of local sales.
Bruce Wiitenen, vice president of Juettner Motors, says that the program has been “wildly successful” for the dealership and they have been able to make many sales because of it.
Lee has had a different experience – the program has yet to generate any sales.
For the nation as a whole, the program is generally seen as very successful. In fact, it has been so successful that funding may be running out.
The “Cash for Clunkers” program was originally financed with $1 billion from the government, which was used up in just one month. But as of Wednesday morning, Congress is expected to approve an additional $2 billion before lawmakers leave for their August recess. This funding would probably extend the program through September.