IADA BULLETIN FAX LETTER by Emilymohar

VIEWS: 10 PAGES: 3

									                                                                                     August 13, 2009


IADA BULLETIN FAX LETTER
             CAR OF ILLINOIS
             Representing the Dealer Voice for Over 80 Years



         Update on 'Cash for Clunkers' Program
  Yesterday afternoon, IADA, NADA, and other State and Metro Automotive Trade Associations
  participated in a conference call with officials at the National Highway Traffic Safety Administration
  (NHTSA) regarding the "Cash for Clunkers" (CARS) program. We reiterated a number of dealer
  concerns about the program, its implementation, and the financial burden it has placed on many
  dealers. NHTSA indicated that it is working hard to address the many technical problems with the
  program. We can report the following:
      1. NHTSA has received over 300,000 applications for payment, but the rejection rate has been
         over 80%. According to some surveys, only 2% of claims have actually been paid so far.
         NHTSA is working to increase the amount of staff processing reimbursement claims in an
         effort to shorten the amount of time it takes to process a voucher claim.



      2. Many of the claims NHTSA has approved have not been tied to an invoice number. NHTSA is
         working to correct this problem so that dealers will soon be able to tell the approved claims
         apart from the pending and rejected claims.



      3. NHTSA stated that it would post a list of the Top 10 reasons that dealer reimbursement
         submissions have been rejected to date. The list has not yet been posted, but when it
         becomes available, IADA will post it at www.illinoisdealers.com. NHTSA indicated that the
         most common reasons for rejected deals are:



                 Absence of a brand, written or stamped (no stickers) on the front and back of the
                  trade-in vehicle’s title that states ―Junk Automobile, CARS.gov‖.

                 Lack of proof of continuous insurance.

                 Summary of Sales Agreement has missing signatures.

                 VIN mismatches.



      4. If one of your claims is rejected, in addition to correcting the error, review every aspect of
         the deal. Compare your application to the CARS checklist, focusing especially on areas listed
         in NHTSA’s "Top 10" reasons for rejection. In addition, review the attached documents to
         make certain all necessary signatures are included. You should receive an email indicating
         the reason for the rejection. If you notice in your "work list" a rejected status and you have
         not received rejection information, e-mail (from the appropriate registered e-mail
         address) the invoice number and a brief explanation of the issue. In the subject line, type
         MISSING REJECTION EMAIL - Invoice #. Email to: 9-amc-nhtsa-cars-ap-supplier@faa.gov.
         The e-mail address above is for technical computer issues only. Do not send deal related
         questions to that address.
5. If you know that you have made an error on a pending submission, you can cancel the
   submission yourself rather than wait for NHTSA to reject it. To cancel a submission:

          Send an email from your registered CARS email address from your dealership
           account to 9-amc-nhtsa-cars-ap-supplier@faa.gov.



          The subject line should read "REJECT {INVOICE NUMBER}" – enter in the invoice
           number for the deal you want to stop.


          Include in the body of the e-mail all of your dealership contact information and the
           deal invoice number again.



6. NHTSA has provided a contact e-mail for dealers to submit questions about reimbursements
   and other technical assistance. The e-mail address is: 9-amc-nhtsa-cars-ap-
   supplier@faa.gov. NHTSA stressed that this address should not be used for general
   concerns or questions.



7. NHTSA stated that its computer system would conduct an automatic review of the CARS
   reimbursement submissions on August 12, which will likely result in a large number of
   rejections. Submissions will be rejected for more obvious errors, such as a failure to include
   any attachments. Dealers should not be surprised to see a larger than normal number of
   rejections sometime today and tomorrow, and are encouraged to closely review all of those
   rejected transactions, identify the errors or omissions, and re-submit them once they have
   been properly completed. This batch of rejections may not contain an explanation for their
   rejection.



8. Yesterday morning the first page of the cars.gov website included the following statement:
   “CONSUMERS SHOULD NOT SIGN CONTINGENCY AGREEMENTS TO PAY BACK THE
   DEALER SHOULD THE CARS CREDIT BE REJECTED.” Later in the day, the statement
   was changed to: “CONSUMERS ARE NOT REQUIRED TO SIGN CONTINGENCY
   AGREEMENTS TO PAY BACK THE DEALER SHOULD THE CARS CREDIT BE REJECTED.”
    On the August 12th conference call, NHTSA indicated that dealers can use a contingency
   agreement if agreed to by the customer. Although not explicitly stated, NHTSA implicated
   that if the customer won’t sign a dealer’s contingency agreement, the dealer does not have
   to sell him or her the vehicle.

   A greater concern is another statement on the first page of the cars.gov website, which
   says: “IF THE DEALER HAS THE NEW CAR IN STOCK, THE DEALER MUST ALLOW
   YOU TO TAKE POSSESSION OF THE NEW CAR BEFORE THE DEALER MAY SUBMIT
   THE CREDIT APPLICATION TO THE GOVERNMENT. PLEASE REPORT ANY DEALER
   TO NHTSA THAT DOES NOT ALLOW YOU TO TAKE POSSESSION OF A NEW CAR
   PURCHASED UNDER THE CARS PROGRAM.” After a lengthy and heated discussion
   between the association representatives and NHTSA, the agency has agreed to review this
   provision.


9. NHTSA is working to achieve a ―soft landing‖ where all legitimate claims will be paid before
   the money runs out. Association representatives stressed that this is the utmost priority
   going forward, suggesting a ―time out‖ to let NHTSA catch up on claims and see how much
   money has been paid—NHTSA will consider this at its “highest level.”
10. Changes can and are being made to the CARS Checklist. To be safe, print a new Checklist
    for each submission. NHTSA indicated that new information has been added to the User
    Guide. You may want to review the guide on a regular basis.


11. We urge you to continue submitting deals as soon as you can so that they can get in line
    and get processed as soon as is possible for NHTSA.



12. If you have any questions about the Cash for Clunkers Program, please contact IADA at
    (217) 753-0220.

								
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