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CATA Bulletin
August 24, 2009


Officials continue to battle issues as CARS program nears end

November 15, 2010

The federal official overseeing the Car Allowance Rebate System said in an Aug. 19 Webinar that payouts to dealers began en mass after his agency corrected a problem which, in an attempt to streamline the process, made matters worse.

"Thousands of payments have been made either yesterday, today or tomorrow," said Frank Borris of the National Highway Traffic Safety Administration. "We’re sorry that happened. We apologize for the delay."

Borris spoke as part of a fourth installment presentation on the CARS program, this one with tips on inputting successful transactions. Borris recognized dealer concerns about the program and said the program also has been "enormously frustrating" for his agency to wade through the mountain of claims. He said the review staff has been quadrupled and that the NHTSA is "pushing as hard as we can on our end."

The Obama administration indicated it would announce by Aug. 21, after this newsletter’s deadline, how it would wind down the popular Cash for Clunkers program and when the incentives will no longer be available. "We want to make sure that dealers know when we’re getting close" to running out of the money that was allocated for the program, Transportation Secretary Ray LaHood told reporters Aug. 19.

LaHood said he recognized that "dealers are frustrated. They’re going to get their money." Borris said the government would honor all deals that are consummated before the program’s end.

Dealers have complained of delays in getting their reimbursements approved, causing a cash crunch for their businesses. Dealers typically borrow money to put new cars on their lots and must repay those loans within a few days of a sale.

"We do not know how many deals are in the pipeline. We don’t know how many dollars are left in the program at this very moment," said Kevin Mize, chairman of the Chicago Automobile Trade Association. "That’s fundamental to the health of the dealerships that are participating. If you run out of money before you run out of deals, that’s not a good situation."

Some dealers are no longer participating in the CARS program. The Greater New York Automobile Dealers Association, which represents dealerships in the New York metro area, said about half its 425 members had left the program because they cannot afford to offer more rebates.

Melanie Bible, spokeswoman for the Pennsylvania Automotive Association, also estimated about half of the state’s 950 dealerships have stopped cutting new "cash for clunkers" deals.

In the NADA presentation, NHTSA’s Borris identified the top reasons that dealer invoices are rejected:

• Missing or improperly marked "Junk Automobile," on the title. The statement must be prominent but it should not obscure the owner’s name or the VIN.
• Missing documents
• Missing signatures
• Mismatches between VINs on the various documents in the submission

Two dealers who have experienced modest success at getting reimbursed for their CARS claims joined the presentation. Scott Addison and Kevin Reilly said rejections often are not the fault of the dealership.

For instance, Addison said that signatures plainly apparent on Page 2 of a document likely were not seen by the auditor because the auditor did not scroll to look for the second page.

"The reviewer should stop and ask a supervisor for help," he said. "Two minutes to do that now would save 45 minutes later to re-review the whole deal."

Another common rejection comes from the failure to prove insurance coverage for the previous 12 months. Reilly said it is best for dealership staff to obtain that when the customer is present because insurance agents can be reluctant to provide that directly to the dealership.

For Wisconsin residents, for whom vehicle insurance is not mandatory, a note can be scanned with a simple statement: "Insurance not required in this state."

CARS procedures have continued to evolve since the program’s July 24 inception. Beginning Aug. 22, a dealer can cancel a transaction that had already been submitted. Previously, a dealer could cancel it only if it was in a saved mode or if NHTSA had rejected it. Dealers now can self-reject a submitted deal. It would return to the dealer’s work list, whereupon it can be edited or removed from the system.

Before Aug. 22, a dealer could appeal to a burdensome e-mail address to kill a deal. One area dealer said he did just that Aug. 13. The NHTSA granted his request—eight days later.

Borris said another common mistake comes from misidentifying the vehicle categories—passenger car or category 1, 2 or 3 truck—and indicating two-wheel drive instead of four-wheel drive. A shortcut from wading through long lists of models: add the percentage symbol in the search, as in %Ford%Unlisted%.

Dealers, said Addison, should never rely on a single employee to review the many documents for errors. "Have as many eyeballs as possible review the documents. It’s a tiring process. If you have only one person doing it, errors are likely."

The most effective attached files, said Reilly, are black and white pdf documents with 200 to 300 dots per inch. Documents that are saved in color or as jpg files increase file sizes and make submission more difficult. Files also must be named properly, according to NHTSA’s user guide.

The financial arms of several automakers have begun offering help to cashstrapped dealerships, in some cases by floating loans to help cover clunker-related shortfalls.

Toyota Financial Services is offering loans to dealers for up to 60 days to cover the lag between a dealership’s payment and its reimbursement. The financial-services arms of Honda, Nissan, Ford and other automakers are offering similar programs.

Life after the fall

November 15, 2010

Ward’s AutoWorld predicts that once the recession ends, four of America’s top five automakers will lose market share by 2012, including Toyota. Only Honda will buck the trend by slightly growing its U.S. share.

Also, Volkswagen will nearly double its current share to 5 percent but will remain behind Nissan and Hyundai, each slated to reach 8 percent market shares. 

With regard to segments, the post-recession U.S. market should show a remarkable ability to achieve balance, according to Ward’s AutoForecasts.

Area dealer tally, as of Aug. 17: 2,423 CARS deals, 40 government payouts

November 15, 2010

Officials continue to battle issues as CARS program nears end A query of CATA dealers on government reimbursements to them under the Car Allowance Rebate System, or CARS, found on Aug. 17 that just 7 percent of all the transactions the dealers had submitted were approved by auditors, and that that payouts had been issued on only 1.6 percent of the deals.

The 47 dealerships that responded to the poll reported an average 52 CARS transactions to date. Eight of them worked 100 or more CARS deals. The top two said they submitted a combined 370 deals to the government but had been paid for just one of them.

The CARS program’s $3 billion funding would provide for an average 45 transactions among the country’s 20,000 new-vehicle dealers. Because of the overwhelming number of sales the program spurred, officials cannot pinpoint how much money remains.

The payout lag and funding uncertainty has led some dealers to withdraw from the program.

Of 800 dealers surveyed by Automotive News Aug. 19, 97 percent said they were unsatisfied with the reimbursement time delays and 13 percent said they were dropping out of the program. Also, 87 percent said they were concerned the program’s $3 billion funding would be exhausted before all their deals get processed.

But nearly three-fourths of the dealers also said the CARS program has boosted their profits.

The CATA survey, extrapolated to an area head count of 450 dealers, shows 92,788,000 new-vehicle sales under the CARS program. Officials said the program would end by early September.

CATA adds to Weinberger scholarships for future technicians

November 15, 2010

Automotive technology students at Carl Schurz High School have become the latest beneficiaries of Chicagoland Dealers Care, a charitable arm of the Chicago Automobile Trade Association. John and Lisa Weinberger of Continental Auto Sports in Hinsdale approached the new-car dealer group to augment the couple’s ongoing generosity and active personal participation in this worthwhile area program.

"We’ve been so very blessed and wanted to find a way to give back to the community in a meaningful and lasting manner," said John Weinberger. "Our thought was since I was a mechanic before becoming a dealer, a program to train young men and women as technicians would be our best avenue of approach.

"Through Jim Butcher of Automotive Youth Education Systems, we identified a program at Schurz High School that was in need of funding. It was a perfect match."

Chicagoland Dealers Care added $1,500 to the Weinberger’s generous contributions. "We congratulate John and Lisa for their support of a curriculum that helps create a path to a life-long career," said John Phelan, chairman of the CATA. "Our dealerships are in constant need of top-flight technicians, and programs like this are an integral part of supplying them."

The Schurz High School ASE-certified automotive technology courses are part of the Automotive Youth Educational Systems that provide internships and partnerships with car dealerships, manufacturers and post-secondary institutions. Managed and taught by Clairene Terry, Schurz is the only high school in Chicago that offers an ASE-Certified automotive program. The school is partnered with Truman College for students wishing to continue their studies for a degree.

"I’d always had a dream to teach an after school program and to establish an automotive academy," said Terry. "The piece of the pie that was missing was monetary support.

"I’m so thankful to the Weinbergers, the school administration and the CATA for their help. Also, we’ve now been granted academy status citywide, which is a great boost for our future."

The Weinberger scholarships will provide $500 each to five students who choose to major in automotive technology or business at the school of their choice. Additionally, the Weinbergers will support one other student with a scholarship of up to $10,000 a year for a maximum of four years.

"This is a program that’s right from John’s heart and it represents who he is," said Lisa Weinberger. "Our goal is to not just fund these students, but to become part of their extended families."

Chicagoland Dealers Care is a part of the CATA’s First Look for Charity Foundation with a mission of building upon the charitable efforts of the group’s new-car dealers in their local communities. Dealers already perform vital support of community charities; the CATA program is designed to enhance that support.

Toyota is top ‘clunkers’ purchase

November 15, 2010

Toyota Motor Corporation has overtaken General Motors Co. as the top manufacturer of new vehicles purchased under the U.S. cash-for-clunkers program.

By Aug. 14, Toyota made 18.9 percent of all new vehicles whose clunkers deals had been submitted, the National Highway Traffic Safety Administration said in its second report on the incentive. GM accounted for 17.6 percent, down from 18.7 percent on Aug. 5, when the initial tally was released.

The Toyota Corolla remained the top new car purchased. The Honda Civic passed the front-wheel-drive Ford Focus as No. 2. The Nissan Versa and the the four-wheel-drive Honda CR-V also climbed onto the Top 10 list.

CATA board committees determined

November 15, 2010

Committee assignments have been made for the CATA board of directors for the current fiscal year, which begins each summer. The board includes 18 directors who sit on any of 12 committees.

All directors participate on the 2010 Auto Show Committee, which is led by that show’s chairman, John Phelan. Other committees:

Employee Relations
John Webb (chairman), Ed Burke, Mike Ettleson, Tom Gollinger and Dan Marks.

Civic and Dealer Relations
Mary Dolan (chairwoman), Dennis Bauer, Monte Scher and Dave Taylor; and Dave Sloan (CATA staff).

Attorney General Advisory
Gollinger (chairman), Burke, Desmond Roberts and Scher; and Sloan.

Secretary of State Advisory
Scher (chairman), Mike McGrath Jr., Marks and Roberts; and Sloan.

Media Strategy
Colin Wickstrom (chairman), Gollinger, Marks, Roberts, Dan Roesch and Webb; and Sloan; and Mike Hillstrom (advisor).

McGrath Jr. (chairman),Bauer, Roesch and Taylor;and Sloan

Kevin Mize, McGrath Jr.and Kurt Schiele.

Schiele (chairman), McGrath Jr., Roesch and Wickstrom; and Sloan.

Compensation Mize, Steve Foley Jr., Ettleson, Schiele, Phelan, Scher and Webb

Mize (chairman), Terry D’Arcy, Dan Feeny, Art Kelly, Bob Loquercio, Mike McGrath Sr., John Phelan, Mark Scarpelli, Bob Van Iten, Greg Webb and Casey Wickstrom.

The Nominating Committee consists of the current and past chairmen of the CATA board. The committee meets in the spring to consider candidates for the upcoming board of directors elections.

Directors can serve up to three three-year terms on the board.

2009-2010 CATA Board of Directors

November 15, 2010

Kevin Mize, Chairman 847-297-5700
Steve Foley Jr., Vice Chairman 847-564-4090
Mike Ettleson, Treasurer 708-579-5000
Kurt Schiele, Secretary 630-279-2160
Jerry Cizek III, CATA President 630-495-2282

Dennis Bauer 708-720-2000
Ed Burke 630-505-8282
Mary Dolan 708-442-9000
Tom Gollinger 847-882-2200
Dan Marks 847-367-1700
Mike McGrath Jr. 773-342-6300
John Phelan 708-442-4000
Desmond Roberts 708-352-2400
Dan Roesch 630-834-8000
Mark Scarpelli 847-395-3600
Monty Scher 312-225-4300
Dave Taylor 815-935-7900
John Webb 630-469-6600
Colin Wickstrom 847-381-8850
Board members welcome any questions and comments from their fellow CATA members!

In Memoriam

November 15, 2010

Robert Burrow, who owned Bob Burrow Chevrolet in Barrington from 1965 to 1983, died Aug. 4. He was 83.

He was chairman of what was then the Illinois New Car and Truck Dealers Association and was active with the Barrington Chamber of Commerce. He also worked on commissions for then-Illinois Gov. Jim Edgar, and was finance chairman for a state senator. Mr. Burrow is survived by his wife, Lois; sons Bruce and Dale; daughters Bonnie and Donna; and several grandchildren and great-grandchildren.

John Morden, proprietor for 20 years of a namesake Buick dealership in Chicago, died Aug. 12 at age 74. Mr. Borden opened his store in 1971 at 907 W. 35th St., about six blocks west of U.S. Cellular Field. He later relocated to Treasure Island, Fla. 

He is survived by two sons and one daughter.