Dealers Being Audited Before Being Paid.
The United States federal government is making random, unannounced visits to car dealerships in order to verify their complete compliance with the recent ‘cash for clunkers’ program.
The government is making sure dealers completely destroyed the engines of all trade-ins participating in the ‘clunkers’ program. The Transportation Department auditors’ focus is on possible fraud in the disposal of trade-in vehicles, said National Automobile Dealers Association spokesman Bailey Wood.
In Europe’s ‘clunkers’ program, the majority of fraudulent activity involved dealers not destroying the vehicles, and instead, sold the used cars.
State Associations across the country also warned dealers about these unannounced visits.
“We expect that a high percentage of dealers will be audited,” the Virginia Automobile Dealers Association said.
NADA e-mailed members yesterday advising them of audits, with the following advice: “Please make sure that all transaction paperwork and trade-in vehicles are in order.”
The cash for clunkers law, signed by President Barack Obama, gave the Transportation Department the authority to audit car dealerships at any time, for any reason.
Some dealers are upset.
“The government seems to be more interested in auditing early on rather than paying early on,” said Donald Hall, president of the Virginia Automobile Dealers Association.
Mr. Hall is referring to the fact that as of August 31st, only 5.7% of all ‘clunkers’ deals have been reimbursed. Polls in North Carolina, Virginia, Louisiana and Alabama showed that car dealerships have been reimbursed for only 2,701 of the 47,693 transactions submitted for rebates.
Hall continued, “The government doesn’t see the sense of urgency in paying money back to the dealers.”
