Auto Shipping Blog

Archive for August, 2009

It started of as a way of encouraging people to invest in more Eco-friendly automotive options while also providing a way of stimulating an immensely struggling automotive industry. The CARS program, also referred to as the Car Allowance Rebate System, was originally funded with one billion dollars. To the surprise of both the automotive industry and the Government alike, these funds were exhausted inside of a month, three months earlier than anticipated. The answer to this problem took form in an additional $2 Billion, a total funding of approximately $3 Billion.

The idea was that if you traded in your old hunk-of-junk gas-guzzler, you would be rewarded by receiving up to $4500 towards a newer more fuel efficient vehicle. At face value it would seem that everyone is making out in this situation. However, recently there have been some less than thrilled auto dealership owners who have come forward to voice complaints. For starters, dealers are beginning to feel as if the Federal Government is unable to effectively run this program. Many dealerships are toying with the idea of discontinuing the program based on the notion that the Government is taking an abundance of time to reimburse dealers, as well as denying a large amount attempted transactions.

One organization known as the Greater New York Automobile Dealers Association – GNYADA, are making their voices heard. President Mark Schienberg begins by point out that since the commencement of the program, many of these dealers have paid out hundreds of thousands of dollars in rebates and “ only a very small percentage of that money has been paid back to the dealers, leaving these small business owners too cash strapped to continue offering consumers the discounts. Even in the best of times, carrying this much debt would cause problems, but in today’s credit-strained economy, it’s simply too much for the dealers to handle.” It’s not hard to see where the problems begin to form.

Though the Transportation Department refuses to release exactly what percentage of applicants are denied, one survey suggested that some dealers have said up to 80 % of their rebate applications ended in rejection, while other dealers are already approximately $200,000 in debt due to the program. The biggest concerns/problems being voiced are:

Many dealers feel that legit deals are getting rejected by the federal government for minute mistakes and/or typos – and there is no effort or guidance to assist in explaining how to correct these mistakes.

Program administrators are taking to long to provide a solid “yes” or “no” answer regarding qualifications.

Trying to get through the customer service phone lines can take several hours.

The computer system used by the Government is full of glitches, which prevent dealers for applying for the much needed rebates.

Also, with the boost in car sales, the car shipping industry is definitely seeing more business, yet another branch of the auto industry within reach of the program. Though most dealers do see the CARS program as something which has helped stimulate the automotive industry as well as encourage people to purchase more fuel efficient vehicles, changes must be made in order to keep them supportive and on-board.

In recent months, our nations Automotive industry has taken a turn for the worse.
With automotive giants Chrysler and General Motors being bought out by international automotive
companies as well as the United States Government, it’s safe to say that this is the worse automotive
depression in recent history. This is partially the reason that the CARS program was implemented
by both the Administration and the U.S. House. Known also as the Car Allowance Rebate System, CARS
was first signed into effect on July 24th, 2009. Upon its commencement, the program
was aimed to try and help increase new-vehicle purchases, something which would help revive struggling
automakers as well as dealerships.

The original budget which was expected to last through November first, 2009, was $1
Billion. Sure enough, roughly three months ahead of schedule, these funds expired, sending certain
individuals into a frenzy. Posed with the threat of the program ending at midnight sometime last week,
some dealership owners, such as Tamara Darvish who owns 18 dealerships in the Washington Area, have
reported keeping their dealerships open up until three A.M., to assist those customers
interested in getting those last minute trade-ins accomplished. Luckily for these people, the U.S.
House has recently voted to extend the funding for this program by an extra $2 Billion. This
figure is expected to last through the beginning of November, but if spending continues to Boom,
as it recently has, this figure could run out much sooner than that.

This extra $2 Billion will finance roughly 750,000 trade-ins, offering a maximum rebate
of $4,500 off. President Obama has stated that he was “very pleased with the progress the House
has made.” Jeremy Anwyl, of the automotive web site Edmunds.com attributes the increase in sales
by claiming, “It’s the rage, and it’s bringing would-be buyers out of the woodwork,” most of
which have been dangling over the fence for more than a year now. One statistic released by
the United States Government which demonstrates success on various levels includes, “On average,
the vehicles being purchased are 61 Percent more fuel-efficient than the ones being traded in.”
This shows that while sales are increasing, this program also promotes eco-friendly standards.

There are those individuals such as Arizona’s Republican Representative Jeff Flake who
are less than thrilled with the funding of such programs. In one interview he was quoted as
saying that the program is being administered poorly and ends up choosing economic winners and
losers. He poses the question, “Why are we deciding to aid this sector and not another?”
This is perhaps a question that requires further inquiry, although for the time being, the American
public is showing it’s support as it dried up the programs funds three months earlier than anticipated.