Cash-For-Guzzlers Plan Taking Shape
Dealers told to register online now; rules expected by July 24
Thousands of dealers were sent federal letters today telling them how to register electronically for the cash-for-guzzlers program, rules for which will be issued July 24, a U.S. Transportation Department spokesman said.
The government said definitively for the first time that not only will regulations be available next Friday, but dealers can also file claims at that time for federal reimbursement of payments made to consumers under the program.
"We have full confidence that we'll be able to put this together by then," Transportation spokesman Rae Tyson said in an interview today.
The agency is adding server capacity next Friday so that expected heavy traffic volume doesn't crash its Websites, Tyson said.
Only dealers who register can participate in the new program, aimed at spurring auto sales by offering credits of up to $4,500 to customers who swap old vehicles for new, more fuel-efficient cars and light trucks.
The program calls for dealers to provide the credits to customers, and then to file with the government for reimbursement. Dealers also will have to dispose of the engines and drive trains of the old vehicles to keep them off the road in an effort to improve the fuel economy of the U.S. fleet. Tyson said the new federal rules are aimed in part at preventing fraud in dealer disposal of used vehicles.
Today's letters instruct dealers how to use a secret code to access a new Transportation Department Website just for dealers, Tyson said. Registration can begin today, a copy of the letter shows.
Dealers will have to provide personal banking information when registering, and those with more than one vehicle franchise will have to file separately for each franchise, the letter says.
The new dealer Website will be inaccessible to the public and will be linked to the Transportation Department's cars.gov site that details the program for consumers, Tyson said.
In preparing the letters, the government asked car companies for the names and addresses of all current dealers, including those slated for termination by General Motors, Tyson said. There were more than 19,000 dealerships as of the end of June, according to National Automobile Dealers Association data.
President Barack Obama signed the cash-for-guzzlers legislation last month, and dealers were allowed to begin selling cars under the program July 1.
However, dealers couldn't file for federal reimbursement until the rules were announced, nor could they be sure they were complying with the yet-to-be-released standards.
Both the government and NADA urged dealers to wait until the rules were out, but a number of dealers have already sold cars under the program. It's these dealers that the Transportation Department worries may overload its systems next Friday with reimbursement claims, Tyson said, adding the Transportation Department is urging dealers to space out their claims.
The program has already drawn extraordinary interest among both dealers and consumers. The cars.gov site has been heavily trafficked since it was launched less than a month ago, Tyson said. He said the agency's hotline fielded about 2,300 telephone queries yesterday, more than 400 from dealers.
Written by Neil Roland
July 17, 2009