Channel | Auto Industry News

CARS Enters Enforcement Phase

WASHINGTON – Recent actions by a government agency, which were reported by USA Today, could mean the $3 billion Cash for Clunker’s program is entering the enforcement phase.

On Sunday, the newspaper reported that the National Highway Traffic Safety Administration (NHTSA) is investigating at least 20 dealerships it claims violated the rules of last year’s Cash for Clunkers program. Quoting government auditors, the report said that up to $94 million in rebates may be ineligible because they lack the proper documentation.

A NHTSA spokesperson told the newspaper that there’s no evidence of widespread fraud and said the violations are a small fraction of the 18,915 dealers who participated in the rebate program, which attracted 678,418 new-car buyers.

In a report issued last April, Joseph W. Comé, assistant inspector general with the U.S. Department of Transportation, said 3.3 percent of the claims it reviewed, or about $94 million in rebates, were missing paperwork.

“We project that almost 22,000 transactions lacked supporting documentation, such as proof of insurance, in the CARS database at the time of our audit,” he wrote.

He added that some of those transactions his office reviewed could ultimately prove to meet the program’s requirements with additional paperwork, which NHTSA confirmed through its own review.

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