Dealer Turns Clunker into Trade-In, Upsets Customers

Xterra

California couple Dan Hoang and Tara Bui turned in their 2001 Nissan Xterra using the Cash for Clunkers program to get the low-mileage vehicle off the road. A few weeks later, however, they discovered that the dealer had simply put it up for sale as used car.

The dealership avoided breaking the law because it never asked for a reimbursement credit from the federal government’s program. Hoang and Bui were not happy that the Xterra, which they said averaged 17 mpg, would still be on the road.

“One of the major reasons for me to bring the Xterra to the car dealer was due to the program’s requirement that all clunkers were to be destroyed,” Hoang wrote in a complaint to the U.S. Department of Transportation. “If I had known that the dealership was using the car as a trade-in, then I would not have brought the car in, but simply kept the car for another year or two.”

The Department of Transportation said that the CARS program has no jurisdiction over the dealership’s decision since it never requested the government credit.

The couple received a $3,500 credit toward a new VW Jetta, and the dealer is selling the Xterra for $5,995.

Couple Shocked to Find Their Clunker is for Sale (OC Register via Consumerist)

By Stephen Markley | September 23, 2009 | Comments (16)

Comments 

3 Pac

hilarious! see what happens when government starts tinkering with the marketplace?? the marketplace strikes BACK!

ermatthe

^Someone abuses a program and the instead of blaming the abuser you blame the creater of the program?

That kind of logic opens up a HUGE can of worms. You might want to check your logic there buddy.

That is funny though.

tsquish

I don't see the problem here at all for the dealer. If they can fetch more than $3,500 why not sell it? Profit folks is how we all make a living (including the govt. they collect taxes from our profits).

Do you we live in "America" or "Give Me a Handout" nation?

ermatthe

To me the problem is the deception- did the dealer tell the customer that they were getting the CARS rebate when they fully inteneded to just trade it in like normal?

If the buyers' paper work shows a $3500 TRADE IN value, then that's what the dealer did.

If their paperwork shows a $3500 REBATE and a couple hundred dollar trade in/scrap value (the way that the cash for clunker deals have to be structured), then it sounds like fraud on top of deceiving the customer.

Ziggy

I believe I made a comment about the Xterra having a higher resale value than the C4C rebate in a previous post. Something like this is not surprising. If it's in good condition and the market will give them the $6,000 price then so be it. I'm actually surprised that the seller really cared about what happened to their car after they got the rebate $...I'm sure most that used the C4C were doing to get a clunker off the streets. Give me a break.

I think there were many consumers who weren't thinking about the value of their cars when they sought the clunker rebate. It should be spelled out to them, certainly, but more of those junked cars could have fetched at least or perhaps more than $4,500.

Mike

I agree with the dealership. There was no reason to junk a perfectly good car. The buyers got the money for the new car, so why would they complain. Dealers are in the business to make money, and in this economy, it's a better choice to make money on a fully marketable car, rather than scrap it for nothing. The dealership is just being resourceful.

I'm not following Hoang's point (the p-ed off consumer). If they were so concerned about getting gas-guzzler's off the street then why'd they buy the thing in the first place (and then said they were going to keep it if it wasn't destroyed)? Seems like a contradiction and they are probably more upset that the dealer screwed them out of an extra $2500.

Peppy

Good for the dealer. I'm glad they decided to do the American thing and help the economy by trading it in and then re-selling it than just simply destroying it.

Molson

A dealer not being honest??? Say it ain't so!

hmmm

sounds like the dealer probably cheated the customer out of a couple hundred dollars of scrap value that they would have gotten too.

not much but still.

Wolfman

The Hoang's should be happy as the rebates for the C4C program are considered taxable to the buyer as income. They were just saved several hundred dollars in tax money. Had people actually read the bill, they would have known that the program was supposed to include being shown what the value was of the vehicle they were trading. If it was worth more than the rebate, they were supposed to get that amount in trade, and have it run like a normal new car sale. There was massive misuse and abuse of this program. Not surprising given that it involved collaboration of two of the most corrupt entities in the country.

Style

Wrong - Have YOU actually read the bill?

Do I get any money for my trade in vehicle in addition to the CARS credit?

YES. The law requires your trade-in vehicle be destroyed. The dealer must disclose to you the scrap value of your vehicle. The dealer is entitled to keep up to $50 of the scrap value for administrative fees. You are entitled to negotiate about who keeps the remaining scrap value. For example, you may use that money toward the price of your new car separate from the CARS credit.

Is the credit subject to being taxed as income to the consumers that participate in the program?

NO. The CARS Act expressly provides that the credit is not income for the consumer.

If they are so upset that gas guzzler is on the road, why did they buy it in the first place?

Vahé

I'm glad the dealership decided to sell it. Destroying it is a waste and anti-environment. Plus, I like the XTerras. They think that somehow the dealership should have destroyed it or they would've kept it?! I mean, this way, someone else gets to own it for possibly longer than these fools would've.

Alex

So what? i'd pay $3500 for a xterra in good condition, i would even give em an extra $500 to ease their decision, this type of program will hurt people in the long run and not use a vehicle too its full potential, if your worried about the earth, scrap getting a new car and buy a bicycle you hippies!

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