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Brian Pasch

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stop-signWe are now advised that the CARS program may go on hold. Our prediction on Tuesday 7/28 that CARS funding could be used up by August 1st was very accurate. Some in Washington are is concerned that there may already be enough CARS sales completed to use up the initial funding. Consumers now have a reason to sing along with Connor Pasch as he sings the Cash for Clunker Blues. Watch Video Now At 11:40 PM EST the Associated Press said that the program was not suspended and that the White House and DOT are reviewing their options. The NHTSA website has not updates as of 11:40 pm so the program is still on. Read News According to various press reports, legislators are meeting to decide how to handle the situation. I guess when we reported all week that dealers could not get these trades into the NHTSA system finally hit home. Just two days ago, the NHTSA spokesperson was asked about monies running out quickly and he said "I think it's an unfounded concern, It looks to me like we have a long ways to go." Translation: 48 hours is a long time in Washington.

We Did The Math

We have been warning consumers to act quickly since funding would go fast. Many laughed and accused us of creating "a run on the bank" when we predicted funding would be gone by August 1st. Who is laughing now. No One. We have been saying that the NHTSA’s dealer sales enter system was backed up. We told people that the NHTSA website continually boots car dealers off the site during the input process forcing them to start over. We reported that at best it takes 1.5 hours to enter a single transaction in the NHTSA sales system. We said that from our survey over 60% of CARS sales have still not been booked. We pointed out that it would be impossible to “gauge” sales with a broken input system. (view dealer survey on 7/28) There are dealers representing thousands of sales that have yet to enter a car sale for approval. We documented today about the growing frustration of consumers and dealers. Tensions are high. It looks like someone else is doing that math in Washington. It would seem that the NHTSA would like to get caught up and then take a deep breath and see how many sales are really done before opening up the program for more sales.

No Need to Panic

Consumers and dealers should not panic. This can go many ways but the sales that have been completed and that qualify will be honored. What is unknown is if additional funding will be granted by Congress. The NHTSA probably needs 1-2 weeks to get all sales caught up and then the CARS program will resume. Hopefully when it resumes, it will have additional funding. If no additional funding were granted, car dealers would suffer a big blow as they have geared up advertising, staffing, compliance and training for a 5 day program that dissolved. The automotive industry can not handle another death blow.

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