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Cars.gov Approvals
For those of you that are involved in selling cars under the Cash for Clunkers rule, I am interested in hearing about your experiences:
1. How many deals have you contracted versus actually submitted to the system?
2. How many deals submitted have been approved for funding? Declined? Still Pending?
3. Of the deals you have contracted and not submitted for approval, how many are because of missing stips from your customers?
4. How many clunker deals have you done that don't qualify for funding because of violations such as insurance lapses, etc.?
5. What is your confidence level with the program and do you feel that this is helping your business?
6. What are your main frustrations with the program?
7. Of the clunker deals you finance, what is the percentage of prime and subprime deals you have booked to date? Are you seeing more good credit or bad credit consumers taking advantage of the program?
8. Who is actually submitting your deals (including breaking them down, scanning, uploading, etc.? F&I, Sales Managers, Office staff, GM's, DP's?
9. Are you actively still doing these deals or waiting on the sidelines for the uncertainty about availability of funds?
10. Finally, if you had could do it all over again - would you still have done Clunker deals?
No right or wrong answers here, just curious as to everyones' experiences. Please feel free to add any commentary you deem appropriate.
Thanks in advance for your feedback...
1. How many deals have you contracted versus actually submitted to the system?
2. How many deals submitted have been approved for funding? Declined? Still Pending?
3. Of the deals you have contracted and not submitted for approval, how many are because of missing stips from your customers?
4. How many clunker deals have you done that don't qualify for funding because of violations such as insurance lapses, etc.?
5. What is your confidence level with the program and do you feel that this is helping your business?
6. What are your main frustrations with the program?
7. Of the clunker deals you finance, what is the percentage of prime and subprime deals you have booked to date? Are you seeing more good credit or bad credit consumers taking advantage of the program?
8. Who is actually submitting your deals (including breaking them down, scanning, uploading, etc.? F&I, Sales Managers, Office staff, GM's, DP's?
9. Are you actively still doing these deals or waiting on the sidelines for the uncertainty about availability of funds?
10. Finally, if you had could do it all over again - would you still have done Clunker deals?
No right or wrong answers here, just curious as to everyones' experiences. Please feel free to add any commentary you deem appropriate.
Thanks in advance for your feedback...
Replies to This Discussion
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Permalink Reply by Tom Eagleson on -
Tom...here is my feedback, not much but all we've done
1. 6 contracted 6 submitted
2. 6 still pending
3. None
4. None
5. Somewhat confident...moving the small high mileage vehicles that had just been sitting.
6. Does anybody have the RIGHT answer for all our questions??
7. 2 prime...good credit
8. office mgr and GM
9. a little hesitate
10. ABSOLUTELY
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Permalink Reply by Courtney Cole on -
Just have 2 BIG QUESTIONS:
1. When do we get APPROVED??? (just ONE deal)
2. When do we get PAID??
Once I have one of these two experiences -- I will better be able to answer the rest of the questions.
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Permalink Reply by Tom White Jr. on -
Ummm, I wish I could answer those Courtney. As of right now, I have 71 deals entered into the car system dating back to July 28th. I have received zero rejections, BUT MORE IMPORTANTLY, ZERO approvals. I have yet to talk to anyone who has actually received the applied for monies into their bank accounts. According to the Kansas Automobile Dealers Association, not one KS dealer has received an approval let alone dollars forwarded.
While the response to this program has exceeded our wildest expectations, it has caused us a number of issues:
1. Our SSI/CSI scores are taking a beating because of the circus-like atmosphere and the time to complete a transaction. Our traffic quadrupled overnight and we can't get to everyone in a timely manner. We have lots of upset customers bitching about how we should have been more prepared for this. How on earth could anyone expect, prepare for, and implement a system to handle unprecedented levels of traffic over a period of hours?
2. Cash Flow is becoming an increasing concern. While I realize there are many independents on this site upset at being left out, I don't think many (any) of them would relish half a million dollars in receiveables from the government with no timeline for repayment - I would kill for a "check's in the mail" message from someone at this point. This could cause some very REAL challenges for dealers already struggling from a cash standpoint in our current environment.
3. Inventory levels are dwindling to a point that we are running out of cars to sell. Replacing them is going to be a REAL challenge in the coming weeks and months. The manufacturers were not prepared for this anymore than the dealers were in my opinion (not that I would expect them to be). This could cause us some serious issues going into September and October.
4. Our staff is getting little to no rest and everyone is WAY over-worked. I honestly don't know how long we can expect our people to keep up this pace. I have people literally pulling all-nighters at the dealership to try and keep up, and they are at the store the next day as well. While they are doing this on a volunteer basis simply because they take pride in their work, it still is a bad thing. There are WAY more important things than just selling cars (like being good husbands, wives, fathers, mothers, etc.)
5. What does the 4th quarter look like? If you are reading the optional surveys provided to consumers asking whether or not they would have bought a car now if it wasn't for this program, you can't help but realize we are cannibalizing future sales for the here and now. I believe used car wholesale prices will continue to escalate with no corresponding escalation in the books. This means our used car business will get much more difficult. This will cause serious pressure on total monthly sales volumes due to the lack of availability of new cars as previously mentioned.
Having said all of this, I don't think we would do anything different than we are doing. I just don't know how you can say "NO" to sales regardless of the challenges those sales cause. The traffic, sales numbers, gross and net profits, etc. that we are seeing are a "once in a lifetime" event. I guess we will see how it all plays out at the end of the day.
My 2.5 cents (slightly devalued to .00012 cents due to the current circumstances) as always... Feedback appreciated...
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Permalink Reply by Courtney Cole on
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Tom:
I am amazed at your numbers. You must be doing an amazing job of marketing the C4C Program. We are having a huge lift in business but with the exception of ONE DAY, it is on a 1:1 basis with new and used units. We have sold 154 units since the program started with 82 being new and 72 used. Of those 82 new, we have 47 Clunkers.
Now we lost an ENTIRE DAY Tuesday. We had a huge storm come through and we lost power with a showroom full of people at 12:30pm and did not regain anything until 4:45pm. It took another hour to get computers working again. That may have been the MOST DEPRESSED that I have ever been from a retail basis. We sold 18 units on Saturday, 22 on Monday, and then 4 Tuesday (huge momentum killer). We came back with 12 yesterday and I think will be back to the bigger numbers today.
What am I saying? I do NOT think we are stealing a lot of FUTURE business. Many of our Clunker people would NOT have been in the market without this program. In other words, they would not have been buyers period ... but this program made it so good, it put them IN the market.
We are now very, very low on New Inventory so to keep the big numbers, we HAVE to have a big surge in used because we are going to run out of new vehicle inventory. Our people are getting real good at selling incoming new before it hits THE GROUND.
I think we have some serious pent up demand that is timing perfect with the "cash for clunkers" program. Since it is getting so much news coverage, it may be tapping into the overall pent up demand. I look for the C4C program to be a serious springboard into better overall vehicle sales for the future.
I also think you took a serious gamble, and it is going to payoff very well for you. As soon as you get the first yes and the first check (should be no later than Aug 8th ... if they stay to their 10 day promise), you will feel much better about life!!
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Permalink Reply by Craig Lockerd on -
In the for what its worth file......we speak to 75-100 dealers a day......ONE has received $$$$.....most haven't had any even approved yet.....huge issues with submission....people working from midnight till morning trying to get thru......several of our clients have told us about confrontation in regard to insurance rules and providing proof and their 'customer" getting hostile over it. A few are having customers put the $4500 on a Credit Card till it gets approved....just in case....and again just from feedback from our clients that bring it up I would estimate that most would do it again because its created traffic......but I wonder when all the dust clears,if that traffic and whatever deals actually get funded is truly plus business or was it just buyers that would have been in the showrroms in the next 6 months anyway? The what if's are concerning....having to pull cars back,CSI.....Its a horse of a different color for sure as compared to a factory incentive where you have some control,some point of contact.If I were a dealer right now I would be having daily conference calls with my 20 group and make sure every i dotted,t crossed for sure.
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Permalink Reply by Scott Smith on -
Great post! We have a similar situation here in MN, the MADA sent out email results of a state-wide survey, and there were (at that point) over 1000 deals SUBMITTED to the Gov't, and there were 0 approvals! We are very wary of this program. We have switched most of the customers to a used car and made a clean deal. Honestly, we are one of the GM dealers that got the dreaded "letter", so we don't have ANY new inventory inbound. We canceled all of our orders. Maybe a bit crazy, but hey, I'm the F&I guy...
We have done 4 C4C deals, but I see multiple potential issues. I can't send the contracts in for funding yet. 21 day temporary permits (MN thing) may expire before we even get paid from Obama, and it's a $10,000 fine to issue another one. 2 of the deals were done last month, so they had to be reported as sold, booked, etc. for last month. It's a real pain to reverse them in 3 weeks if we find out we won't get paid.
I agree with the contention that we are cannibalizing future business. Remember when GM first came out with 0% financing back in 2001'ish? We had a FLOOD of customers, just like today, we sold out of new cars, and then hardly sold a new car at all for a YEAR or more!!!
I think with all of the brain damage you larger dealers are having to go through is going to end up being a lot more worth than the few hundred dollars we make on these little cars.
Keep up the good fight!
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Permalink Reply by George Toth on
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I do not envy the dealers with many deals hanging out there. No matter how well capitaized you are taking that much money out of the store can create major headaches. I am not sure I agree with the thinking that this is not robbing business six months out. Most likely you can add the "you will get paid within ten days of approval" to the list with "the checks in the mail". Like somebody said at a town hall meeting "you can't even run a clunker program right" lol. On the bright side I have to believe that when they finallly figure out how to do this the checks will most likely come quickly. I have to believe that they are aware of the cash flow issues dealers face. Hopefully everybody will come out of this whole and business won't totally stop when it ends.
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Permalink Reply by Tom Eagleson on
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Has anyone resubmitted a reject clunker claim?? Do you have to start all over?? Rejected due to inacurate insurance information. I do not see an option to correct submitted data. Anyone???
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Permalink Reply by Tom White Jr. on
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You CAN resubmit rejected deals buy searching for the invoice number under the "Create Invoice" section of the system. Delete the infringing document(s) and replace with the corrected ones. Once you have done this, you can simply submit the whole deal again and restart the waiting process.
Insurance is the SINGLE BIGGEST reason for rejections according to the dealers I have talked with. I had my first rejection this morning due to an insurance lapse of FIVE DAYS! There is absolutley NO GRAY AREA on these deals. They must be clean if you want to get paid. We will not deliver a vehicle without having all of the previous twelve months of insurance up front.
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Permalink Reply by John Douglas on -
Small independent here.
I may be a little off-topic, but one comment above I can relate to regarding used car supply.
Supply is down for used units, and prices are up.
I walked out into a local franchise operation's "Clunker" bullpen yesterday - over 60 vehicles there.
I thought "this is just one store in one medium sized city" (B'ham,AL).
Multiply this by all the stores city-wide, statewide, and nationwide.
All these cars are being taken out of the remarketing loop - two thoughts.
1) Prices will continue to climb.
2) These are vehicles that normally would've been affordable to people who REALLY need a vehicle.
My point is, if we think the used vehicle prices are high now, in a couple of months,
with the reduced supply in the market, we may be looking back and wishing we'd bought more while the prices were "low".
JMO
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Permalink Reply by KARONEL PLOTT on -
SMALL USED CAR DEALER IN TENN I ATTEND 2 AUCTIONS PER WEEK . I HAVE NOT SEEN THE NUMBER OF CARS AT THE AUCTIONS DROP LIKE EVERY ONE IS CONCERNED ABOUT A SHORTAGE OF CARS. BUT EVERYONE IS TALKING ABOUT A SHORTAGE FOR A WHILE. I THINK YES THEY MY BE A SMALL SHORTAGE BUT YOU SPREAD THE CLUNKERS BETWEEN ALL THE DEALERS IN THE US. I THINK WE MAY BE THE REASON FOR CARS BEING SO HIGH. WAS THERE A SHOTAGE OF THESE CARS BEFORE? IF WE ARENT CAREFUL WE MAY LOOK UP IN 60 DAYS AND HAVE A LOT FULL OF CARS WE PAID TO MUCH FOR?
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Permalink Reply by Michael Correra on
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38 total invoices in system
5 submitted and scanning docs furiously to get all others submitted.
0 approvals yet
trying to learn from others experiences and make 0 mistakes in the scan/submission process
owner and gm both breathing fire down my back as thats alot of liability to extend in what are still tough times!
2 fingers crossed!
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