This past weekend my wife and I went out to look at cars for sale at some of the local car dealers.  My wife has been driving my old 1994 Jeep Grand Cherokee since we got back from overseas last fall.  My wife she started driving the Jeep after I bought my Ford Escape Hybrid.  My wife decided she didn’t like driving such a large vehicle and has been wanting to trade it in for a smaller car if the right offer came along.  The new “Cash for Clunkers” program being offered by the US government was just the type of offer that we had been waiting for.  So after looking at some different cars my wife decided she liked the 2-door 2009 Hyundai Accent with the hatchback after taking it for a test drive.  The car was roughly $15,000 and with a military discount and the cash for clunkers rebate the car would roughly end up costing us $9,300.

So we decided to go ahead and buy it so we began to start filling out the paperwork and I can assure you there is a lot of it for this program that is officially called the Car Allowance Rebate System (CARS).  Here is details of how this program works:

Approved last month, the program known officially as the Car Allowance Rebate System offers rebates of $3,500 to owners who relinquish cars rated at less than 18 miles per gallon to purchase ones getting at least 22 m.p.g. If the new vehicle gets at least 10 m.p.g. more than the trade-in, the rebate is $4,500. For SUVs, minivans and pickups, a 2 m.p.g. improvement is required, while a 5 m.p.g. gain nets the full rebate.

The government rebate is taken off the price after manufacturer discounts and incentives are applied.

Reimbursement will be wired directly to the dealers, who must show proof that the clunkers have been taken off the road permanently by being “crushed or shredded,” according to the legislation.

The program is expected to run four months, or until the $1 billion is depleted. The National Highway Traffic Safety Administration has until July 24 to issue the final regulations, putting most transactions on hold until Friday.  [LA Times]

We were qualifying for the full $4,500 rebate because we were trading in a vehicle and buying a new one that had a greater than 10 mpg difference.

So everything was going good and it looked like we would be driving out of the lot with the new Hyundai when government bureaucracy struck.  As part of this program someone who is trading in a car has to prove they had insurance on the car for one year.  This is to prevent people from buying some $500 beater and trying to trade it in to get the rebate.  However, since I was overseas in the military I had a gap in insurance coverage since my Jeep sat on a boat for a month plus storage in the US before I picked it up.  I had cancelled my insurance from the domestic provider in the country I was stationed in and then when I picked up my Jeep in the US I called my American insurance provider to start insurance on the Jeep.

I presented all my documentation showing that the vehicle was on a boat and that if the boat sunk or the vehicle was stolen the shipping company was liable during this period of transport.  However, the government guidelines makes no provisions for military personnel with their vehicles in transit thus the Hyundai dealer couldn’t give me the rebate.  I asked the dealer if he could call someone with the Department of Transportation who administers this program to explain the situation and he said that the guidelines sent to him from the government had no phone number or even an e-mail address to contact someone to discuss a circumstance such as this.  The CARS hotline on their website is just a recording with no option to talk to a real life person.  For the dealer to get his rebate he goes to a government webpage and fills out information on the site  and the government sends them a check to reimburse the dealer for the rebate and sends someone to pick up the old vehicle to be junked.

I picked up my Jeep from the vehicle storage yard this past December which means that I would have to wait until then to qualify for the Cash for Clunkers rebate.  In all likelihood the money for this program will have run out by then and I will have been officially screwed out of a $4,500 rebate simply because I served overseas in the US military.

To further show how messed up this program is, even if I had the paperwork straight the system crashed anyway:

The federal government’s much-hyped Car Allowance Rebate System, which will give Americans up to $4,500 toward the purchase of a new, more fuel-efficient car when they turn in an older, less-efficient car for destruction, has been delayed. Planned for launch today, the program will now officially kick off Monday morning.

A government website devoted to the program originally listed today as a start date, but was updated this afternoon to read, “Starting on July 27, consumers will be able to take advantage of this program and receive a $3,500 or $4,500 discount from the car dealer when they trade in their old vehicle and purchase or lease a new one.”

Pittsburgh ABC affiliate WTAE-TV is reporting that a computer crash is the cause of the delay. “Fifteen minutes after a federal computer system that car dealers use to register for the Cash for Clunkers program was put online, it crashed due to the overwhelming demand,” the station reports.  [US News]

I just thought this was all a perfect example of a good idea by the government executed poorly:

• First of all, how do you start a program and not establish a computer system to handle the dealer web traffic to register people?

• Secondly, you can tell the people who wrote this bill didn’t serve in the military considering there was no provision to protect servicemembers returning from overseas PCS moves with their vehicle.

• Thirdly, how do you start a massive program like this without supporting it with appropriate customer service?

So unless the Hyundai dealer can work something out we won’t be buying a new vehicle under the CARS program and instead my wife will keep driving the Jeep until we see another offer that comes along that is enough of a bargain for us that it would be worth trading in a vehicle that still operates just fine.  Our trade in of the Jeep for a fuel efficient Hyundai should have been a perfect example of what this program was intended to do and instead has become nothing more than another example of government ineptitude.