A Cash for Clunkers Tale


Now that the Senate has agreed to add $2 billion more in funding for the Cash for Clunkers program, we wanted to tell one of the countless stories regarding the headaches that dealers and consumers have experienced while trying to cash in and get a new car. We were a bit surprised, though, to learn of a number of issues that came up when one of our fellow employees tried to trade in her 1999 GMC Jimmy for a new 2009 Ford Escape. It wasn’t exactly an easy task.

As someone who works in the industry, Laurie knew about Cash for Clunkers well ahead of most car shoppers. She and her husband had been contemplating a new-car purchase for almost two years, but once she heard about Cash for Clunkers, Laurie put a hold on any purchase until the plan went into action.

“We waited to buy a house until the first-time home-buyers tax credit went into effect, and when we heard about this I said, ‘We’re waiting to buy a car,’” she said.

Two weeks before the official rules were released, Laurie started contacting dealers using to get quotes on the car she wanted, a front-wheel-drive Ford Escape with a V-6 engine. There was one problem: nobody had one.

Three large Ford dealers in the western Chicago suburbs were unable to track down the specific model.

“When I finally talked to salesmen at two different dealers, they were very curt with me, just saying they didn’t have the car,” she said. “They didn’t even follow up.”

By the time she contacted a fourth dealer on Wednesday night of the first official Clunkers week, she was told there was indeed a front-wheel-drive V-6 model on the lot. By the time Laurie got there the next afternoon, however, that car was gone, but the dealer had an all-wheel-drive one in stock. Lucky for Laurie, that wasn’t a deal-breaker, and she and her husband actually preferred all-wheel drive; they were looking for a front-wheel-drive Escape simply to save extra money on the list price and get the full $4,500 Clunker cash.

Her final deal was still pretty good.

The Escape listed at $28,500, and Ford was offering around $900 in small incentives. Then there was the $3,500 she received from the Cash for Clunkers program, 0% APR for the term of the deal, and the dealer knocked off another $1,100. Her final price was $23,000.   

Laurie was happy with the deal, but even after all that, finding the car she wanted and getting the right deal wasn’t the hard part of her Cash for Clunkers experience.

“Someone at the dealership actually said they were just making it up as they went along because they were unaware of all the rules,” Laurie said.

That type of attitude worried her, but she had a copy of the full 135-page rulebook and made sure that she and her husband tracked down their proof of registration and insurance. Those simple tasks were made harder because current documents don’t show proof of the past 12 months’ insurance or registration. That led to them tracking down what they needed via their insurance company and the DMV.

“The DMV actually had a sheet prepared with all the numbers the dealer had to call, and the dealer got what they needed in the same day,” she said.

All this scrambling was happening as news broke that the government was running out of funds for the program. Laurie said salesmen even shouted through the showroom that they were calling off Clunker deals at midnight just to be sure the money didn’t run out.

That pressure didn’t stop Laurie from making sure she and her husband filled out the government questionnaire, which the dealer didn’t mention. The dealer also didn’t provide the scrap value of the trade-in, as required. Also, the dealer wanted her to pay state tax on the pre-Clunker price, but the program’s rules explicitly state that no consumer should pay that tax. The dealer did agree to omit that from the final deal.

Laurie was worried for the dealer. Even though she got her deal in writing, she worried the dealer might run afoul of the government and not get reimbursed for her trade-in because of the lax oversight.

But the ordeal was over — other than saying goodbye to her old Clunker, of course.

“It got us through a lot,” Laurie said. “I just didn’t want to think about what they were going to do to it.”

Even after all the headaches, in the end Laurie said she was still happy: “It was definitely worth it.”

Photo of David Thomas
Former managing editor David Thomas has a thing for wagons and owns a 2010 Subaru Outback and a 2005 Volkswagen Passat wagon. Email David Thomas

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