Possible clunker program gottcha

[Life_is_Good]

Well.... I couldn't resist trading in my clunker for something that achieves better gas mileage - just what Uncle Sam wants me to do.

So after reading all the requirements, gathering my documentation (title, insurance coverage, etc), we pick out a new car and begin the painful process of price bickering and completing mountains of paperwork.

We get to the requirement of proving that the car has been continually insured for the past full year. Hell, I've had the car for 10 years, and it's been insured without lapse for the entire time - and I have my insurance polices in my hand. The dealer rep says, "that's not good enough. Uncle Sam needs an insurance document called a Letter of Experience." DW and I have never heard of this - and we can't remember seeing this on the gov't CARS website. The dealer tells us that some of his clunker clients have been rejected by Uncle Sam because they couldn't produce the Letter of Experience. He says, just call your agent and they'll fax one right over. Other clients are doing this. He shows us one from Farmers Insurance.

We call our agent at Allstate (major, big, huge carrier!). Agent says, no one ever requests these but they could get me one in 10 days!! Holy crap, that's not good enough. Dealer says if Uncle Sam rejects our deal because we can't produce this... we have to return the new car, take back the old clunker and cancel the deal. Can you believe this? DW and I are stunned.

It seems Uncle Sam doesn't want to make this easy. Why wouldn't my policies be proof enough? They show continuous coverage.

Has this happened to anyone else?

 

[Peter]

I only had to show insurance cards covering the last 12 months, no mention of a 'letter of experience'.

I suspect someone has misunderstood something, somewhere. Maybe the letter of experience is to cover cases where the old insurance cards can't be produced. I'm sure a lot of people throw them away.

Peter

 

[Zathras]

I to would suspect it is an issue with the dealer or even salesman misunderstanding something. May want to check with another sales rep or dealer.

 

[av8er]

I simply had to provide my insurance cards for the last year and proof of registration for the last year...no mention of a Letter of Experience. I agree with Zathras--you may want to call another dealer to see what kind of documentation they're asking for from their clients.

 

[Life_is_Good]

Thanks for your suggestions.

I did call a few other dealers in my area and they indicated the letter of experience is one way to prove coverage. Most people are using the little cards that get stashed in your wallet or glove box.

At the time, my salesman showed me his gov't cars requirements form. It definitely said "proof of insurance AND letter of experience." Obviously, most dealerships are not requiring both.

Now I feel the dealer shouldn't be calling... asking me to return the new car. But if I see my caller ID indicate it's the dealer, maybe I just won't pick up the phone

 

[charlie]

What bugs me is the requirement to crunch perfectly good cars traded in.
Why not just ship them to India or some other country? .... suggested by
Kudlow.

 

[travelover]

What bugs me is the requirement to crunch perfectly good cars traded in.
Why not just ship them to India or some other country? .... suggested by
Kudlow.

According to this video from the Detroit Free Press

Freep.com | Detroit VideoNetwork | Detroit Free Press


The engines are seized and the rest of the parts may be resold.

 

[Zathras]

Two reasons I can see.
1) prevent an increase in the supply of 'clunkers' so the used vehicle market is not impacted.
2) environmentally, it is very expensive to ship these things overseas AND part of the point is to get some 'clunkers' off the road, not just shift who the driver is to someone else.
Not saying they are good reasons, just possible reasons that have some rational behind them.

 

[steve88]

Two reasons I can see.
1) prevent an increase in the supply of 'clunkers' so the used vehicle market is not impacted.
2) environmentally, it is very expensive to ship these things overseas AND part of the point is to get some 'clunkers' off the road, not just shift who the driver is to someone else.
Not saying they are good reasons, just possible reasons that have some rational behind them.

If you ship it to a third world country and they use the vehicle as a business like public transportation then everyuone wins. They are very resourceful over there.

 

[Life_is_Good]

I guess the clunker program is not going smoothly for everybody. It sounds like this dealer is having major problems assisting their clients....

Video - Breaking News Videos from CNN.com

Meanwhile, I have not (yet) been asked to return my new vehicle

 

[kumquat]

If you ship it to a third world country and they use the vehicle as a business like public transportation then everyuone wins. They are very resourceful over there.

Vehicles old enough to be used for parts in Cuba are ineligible.