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Clunkers glitch left Minnesotans hanging
Minnesota ranks fourth in rebates requested -- more than $26 million.
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Turns out, many Minnesotans were getting unfairly clunked in the federal "cash-for-clunkers" program.
A glitch in the application process, which was fixed Tuesday, was caused by the unique way the state handles vehicle registrations. Minnesota ranks fourth in the nation in vouchers requested, and as many as one in five applications may have been rejected because of the flaw.
The popular -- but problematic -- program, officially known as the Car Allowance Rebate System, lets buyers of new vehicles claim rebates of up to $4,500 when they trade in their older gas guzzlers. The program requires owners to prove continuous vehicle registration before trade-in. But Minnesota law allows drivers a 10-day grace period and a chance to pay late fees without suspending their registration.
U.S. Transportation Secretary Ray LaHood said Tuesday that his office has fixed the approval process to accommodate Minnesota's grace period, news that came as great relief to Scott Lambert, executive vice president of the Minnesota Automobile Dealers Association.
"We've been turning customers away because they didn't have the required documentation," he said. "What it'll do is spike sales again."
More than 7,500 Minnesotans have requested vouchers worth more than $26 million, more than Texas, New York and Florida, according to federal data released Tuesday. But only 2 percent of the deals have been given final approval. That has left consumers confused and dealers holding the bag with banks, which normally expect to get paid within five days of a sale.
U.S. Sen. Amy Klobuchar, who learned of the Minnesota malfunction from dealers, told LaHood about it in the morning and by the afternoon had received a letter saying the flaw had been fixed.
Klobuchar said the Senate is expected to vote to extend the program before going home Friday. The White House has warned that the program could crash to a halt if the Senate doesn't act on a House bill passed last week that transfers $2 billion from an economic stimulus account into the cash-for-clunkers rebate fund. So far, about a quarter-million Americans have used the rebates to buy new cars.
Klobuchar said LaHood assured her he was adding staff and other resources to clear roadblocks that have plagued the application process since it launched last week.
"My vote is contingent on fixing this Minnesota glitch, a pledge that it will fix the computer system overall, and also making sure the money comes from already allocated stimulus money so that we're not spending more money," she said.
Jackie Crosby • 612-673-7335
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