Cash for Clunkers- Let the Buyer Beware

Consumer advocates have called upon the Department of Transportation to investigate two scams they allege are being perpetrated by car dealers participating in the Car Allowance Rebate System, better known as Cash for Clunkers.

Spokespersons for two groups, Consumer Action and Consumers for Auto Reliability and Safety, claim that some dealers are making customers sign waivers that will mean that if the dealer is not given a rebate by the government, the consumer has to make up the difference, even if fully accepted as eligible by the dealer. The other practice is “double dipping .” The dealer misleads the consumer into making the “Cash for Clunkers” payment up front, promising to forward the $4,500 later. Next, the dealer tells the customer that their car “didn’t qualify” and pockets the rebate check from the government.

In response to the demands of the groups, the Department of Transportation has placed a notice on its website that “consumers are not required to sign contingency agreements to pay back the dealer should the cars credit be rejected.”

The moral of the story is that whether it’s cash for clunkers or any other aspect of buying a car, know the law and know your rights. At Norman Taylor & Associates, we’ve helped consumers using California lemon law as well as federal warranty protection statutes and consumer fraud statutes for over 20 years. If you feel you’re being flim-flammed, contact an attorney in your state right away.