Is cash for clunkers worth the headaches?

(NECN: Peter Howe, Woburn, Mass.) – Just hours after officials warned the week-old “cash for clunkers” program had blown through its $1 billion dollar allotment, the U.S. House rushed through another $2 billion Friday. If, as expected, the Senate follows suit next week, that should pay for another 500,000 Americans to get up to $4,500 rebates for trading in gas guzzlers for more fuel-efficient cars. But like so many problems, “Cash for Clunkers” isn’t one the government can solve just by throwing more money at it. For dealers across the country, applying for and receiving the $3,500 and $4,500 government rebates has been a red-tape bureaucratic fiasco. Rep. Candice Miller, a Michigan Republican, said tripling the program “is good for the auto dealers, it is good for the auto manufacturers, it is good for the suppliers, it is good for workers.” President Obama acknowledged problems but said Cash for Clunkers “has succeeded well beyond our expectations.” George Martell, general manager of Woburn Foreign Motors, which sells Toyotas, Jaguars, and other import models, agreed that “it certainly has motivated sales and it’s brought people out to the dealerships.” He and his sales crew had closed nearly 40 cash for clunkers trade ins as of Friday afternoon. “We’re up 20 percent in new car business this month, and I can attribute that directly to cash for clunkers.” The program allows people who have a car averaging 18 miles a gallon combined city-highway driving or less, according to the EPA’s www.fueleconomy.com website, to get a rebate for trading it in for a new car or a five-year-plus lease on a new car that gets at least 4 miles a gallon more than the car they are trading in. The higher rebate is for a 10-mpg upgrade. Similar deals, with more restrictions, are available for pickup trucks and SUVs. But while Martell likes the incentive, for dealers the implementation has been one headache after another. “Challenging would be a soft word for it. It’s been very, very difficult,” Martell said. “The system is basically overloaded so if you stay on it, you time out because it is just getting jammed.” Martell’s comptroller, Harry Lozon, has been pulling his hair out trying to process rebates on the government website. “I’ve just put this one deal in four times and been booted out all four times,” Lozon said in an interview as he tried to process an application for a rebate through the www.cars.gov website. “All day today we’ve gotten one deal in, saved. That’s all we’ve gotten.” Similar reports came from all over the country of crashing computers, endless waits, thousands of backlogged applications, and no clear word from the government when or if dealers would actually get compensated for rebates promised by the program. Government officials say they hope to smooth out the glitches. And George Martell stresses, this is still worth the headaches, for everyone. “This bill’s great for everybody. We’re taking cars off the road that aren’t fuel efficient, they’re not as environmentally friendly, they’re not as safe as the newer vehicles.”