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Dealers, Buyers See Financial Fallout From Cash For Clunkers

Thousands Are Getting Rejected

POSTED: 2:03 pm EDT September 22, 2009
UPDATED: 8:06 am EDT September 23, 2009

Cash for Clunkers may be over, but it's far from being a done deal. The car-buying Web site Edmunds.com reported several thousand of those clunker trade-ins are being rejected.

Gary Heflin, who works for a Chevrolet dealer, said, "Right now we probably have 15 deals. So that's around $60,000 that we're owed." But Edmunds.com reported some dealerships are getting rejection notices, either for a paperwork error or a customer who really didn't qualify after all.

A few dealers prepared for that possibility, asking customers like Tom Sharkey to sign a waiver if their clunker was later rejected. Sharkey said, "I was going through and signing the papers, and one of the last papers was a document stating that if the funding was denied for any reason, their fault, the government's, whatever, then I would agree to pay them that amount."

If you signed a waiver, you are legally bound to repay the clunker cash. But Edmunds said if you didn't sign anything, the dealer cannot ask you to repay the $4,500. By law, you get to keep the car and the dealer will have to eat the loss.



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