Relief Greets CARS Program Extension

It seems Cash for Clunkers has fallen victim to come clunky computer equipment.

Citing “overwhelming demand” on the computer system that administered the Car Allowance Rebate System (CARS), the Department of Transportation extends the application deadline to noon Tuesday.

“Despite a large increase in the system’s capacity, the (CARS) website was down temporarily this afternoon,” the DOT says in a statement. “Because of the temporary shutdown, dealers have been given extra time to file the necessary paperwork.”

However, the deadline for completing sales remains 8 p.m. tonight.

Both deadlines are based on Eastern time, but West Coast dealers are unfazed. The program “can’t end soon enough,” one dealer source tells Ward’s.

“There’s always bias between the East and West Coast,” says Mike Riise, general manager of Vallejo Volkswagen in Vallejo, CA. “The East Coast always get their way.”

No matter this time, Riise adds. “I stopped doing the Clunker program Thursday,” he says. “System crashed on Thursday and Friday.”

On eligible transactions aimed at getting gas-guzzlers off America’s roads, CARS gives new-vehicle buyers $3,500 to $4,500 for their used vehicles. But the $3 billion program, credited with generating more than 450,000 sales, has been plagued by computer glitches as dealers attempted to record the transactions.

Delays prompted most to front the rebates for their customers. “I haven’t received a penny yet,” says Riise, who recorded four CARS sales.

Extending the application deadline was “definitely a good idea,” says Russ Shelton, owner of Shelton Pontiac Buick GMC in Rochester Hills, MI.

“We need that much time just to get everything in,” Shelton tells Ward’s. “The site crashed today and it left us in a lurch.”

Meanwhile, industry experts advise dealers to be aggressive in the marketplace if they want to maintain their sales momentum.

“Use clearly communicated “Upfront Pricing” that shows attractive discounts and name their own promotions to some derivation of the (CARS) program,” says Jesse Toprak, vice president-industry trends, of TrueCar.com, a website that tracks pricing.

“We would also target consumers who did not qualify for the promotion and bring them in with guaranteed prices that they won’t have to haggle over, use manufacturer incentives and their own discounts to show deals that can amount to higher discounts than the CFC program,” Toprak tells Ward’s.

– with Byron Pope

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