Thursday, August 13, 2009

Clunker update...

FYI - if you happen to be one of the many consumers looking to close a cash for clunker deal, be aware that many dealers are asking buyers to sign contingency forms that put you on the hook for $3,500 or $4,500 if the dealer doesn't get his rebate for any reason - whether you or the dealer is at fault.

As someone that owned a qualifying vehicle and is scheduled to pick up his new vehicle tomorrow, I was convinced from the beginning of the CFC program that it was ripe for fraud. Dealers exploited consumers limited understanding of the program to sign contracts for many clunkers that may not qualify. Many less reputable dealers are now looking to get you to agree to make them whole. Run, don't walk away from any dealer that tries to pull this type of deal....

"The U.S. Department of Transportation is advising consumers taking advantage of the “Cash for Clunkers” program not to sign contingency agreements promising to pay back up to $4,500 if dealers don’t receive payment from the government.

No contingency agreement is required to participate, the Transportation Department, which administers the $3 billion Car Allowance Rebate System, said on its
Web site.

The Minnesota Automobile Dealers Association has a form on its Web site that members can use as part of a new-car closing. By signing the form, the buyer agrees to reimburse the dealership the incentive amount if the dealer is unable to obtain the credit from the government “for any reason.” The consumer can also return the car to the dealership and pay “a reasonable charge” for use of the new vehicle, according to the form."

I'll keep you updated if my local dealer tries to pull something like this tomorrow.

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