CDK's purchase of Auto/Mate may create a major disruption in the dealer management system (DMS) industry. Here is our take. DOWNLOAD
As of today, the NHTSA hot-line indicated that official dealer registration letters have not been mailed. With over 20,000 new car dealers predicted to be mailed, the clock is ticking fast for NHTSA staffers. I hope their break room is stocked with caffeine.
If the NHTSA registration letters were mailed tomorrow on July 15th, we project that a majority of dealers would get the letters on Friday July 17th. That would give every new car dealer in the United states four normal business days to register for the NHTSA Car Allowance Rebate Program if we are to go by the projected July 24th start date.
When you look at the likelihood of this massive registration effort, the 24th seems impossible. We also have no confirmation when the letters will be actually mailed. Many questions on the implementation of the Cash for Clunkers bill remain unanswered.
To read what consumers are saying about the CARS program, check out our Cash for Clunkers blog which as a few hundred consumers comments.
Will the NHTSA be able to accommodate this rush of registrations? The dealer registration process will require the NHTSA to validate the information that is submitted by car dealers. You can also bet that a number of applications will not be properly submitted the first go round. This massive project dropped on the NHTSA in such a short timeline was unrealistic from the start.
The NHTSA has told car dealers that the final Car Allowance Rebate System rules will be drafted by the 24th but the likelihood of the program starting on July 24th with registered dealers is in doubt. Will NHTSA allow dealers to participate as long as their application is pending? No one seems to know at this point.
We will wait for the official rules to be posted on the only official website for the CARS program: http://www.cars.gov.
In the meantime car dealers will have to deal with the uncertainty of facts until next week and deal with the increasingly irritated consumer population who would like to purchase a car under this program. Consumers will have to act fast once the rules are in place because we predict that the $1 billion in cash will be gone by Labor Day.