'Cash For Clunkers' Computer System Crashes

Dealers Shift Into High Gear To Register For Federal Program

Fifteen minutes after a federal computer system that car dealers use to register for the Cash for Clunkers program was put online, it crashed due to the overwhelming demand.

The system came back online just before 10 a.m., about five hours later.

At 5 a.m. Friday, automobile dealers across the country began the certification process for the Cash For Clunkers rebate program.

When dealers called in to inquire about the inaccesible computer system, an audio recording says, "We're sorry, the system is down right now. We are aware of the problem. You will not be able to register until the problem is fixed."

David Perry, the head of Information Technology for Colorado's Medved Autoplex, said he was only able to register one out of the five Medved dealerships -- the Ford Lincoln Mercury in Castle Rock -- before the system crashed.

However, Perry said he's not positive that one dealership was registered for the program because the next page on his computer screen said he would be e-mailed a confirmation and he doesn't have the verification message yet, and doesn't know when it will arrive.

The Medved group was poised to input as many dealership names as possible when the checkered flag for the program was waved Friday morning, and had been worried that the computer system meltdown would occur.

Perry said he's not surprised about the system crash, given how many eager dealerships wanted to register for the program.

Dennis Hardison of Littleton spent Friday morning shopping for a deal. He is hoping to trade in a 96 Jeep Cherokee for a mini-van with better mileage.

In addition to the federal rebate, many dealers are also offering additional incentives worth thousands of dollars.

"For us, it's thank you Obama," he joked.

On Thursday night, government officials in charge of the program said they were ready for a crush of interest and steps had been taken to avoid any computer glitches or meltdowns.

"We have all the technology in place, and we'll hope for the best," said Ellen Martin, a spokeswoman for the Department of Transportation.

Dealership owner John Medved said Friday's computer glitch didn't affect any customers looking to buy a new car, but it could be a sign of things to come. Medved said the real test for the system will be on Monday, when the dealerships will begin entering the names of qualified car buyers into the system.

Medved said car owners who were presold a car or plan to buy a car this weekend should be OK and eligible for the program. However, customers who are looking at taking advantage of the rebate later in the week could find that the program has run out of money, Medved said.

Timing is important for the dealerships because the race is on for the government funds, which are expected to run out before the program technically ends in November.

The program, officially called the Car Allowance Rebate System, or CARS, is designed to help consumers buy or lease a more environmentally friendly vehicle from a participating dealer when they trade in a less fuel-efficient car or truck.

Consumers can earn either $3,500 or $4,500 in exchange for their gas guzzler. The federal program is designed to energize the economy, boost auto sales and put safer, cleaner and more fuel-efficient vehicles on the nation's roadways.

"We have a billion dollars, that's billion with a 'B,' and we plan to give it all away," Martin said.

Car dealers had been planning for this day for weeks.

Friday morning marked the start for the process for certification, but actual deals for customers aren't expected to begin until Saturday or Monday.

On Thursday, local dealers and car buyers were crunching the numbers to determine how the billion dollars will trickle down.

Martin told 7NEWS 27,000 letters were sent to dealers across the country about participating.

Tim Jackson, president of the Colorado Automobile Dealers Association, projected around 200 Colorado dealers would sign up, resulting in eight to 10 vehicles per dealership, on average, earning the rebate.

"The dealers wish it were more," Jackson said.

Still, owners like Medved celebrated the increased traffic with a smile after some difficult financial months.

"It's been a long time since I've smiled, but I found those muscles again," Medved told 7NEWS Thursday with a chuckle.

Medved said customers were folding "clunker" cash with discounts from the recent hail storm and manufacturer incentives, for more than $10,000 in savings.

"I have commitments on more than eight or 10 cars," Medved said of the government program.

He explained those vehicles were being held on the lot for customers. 7NEWS learned of other dealers that took deposits in advance and even finalized deals with the rebate built in, in anticipation of the rebate.

Such "pre-sales" are allowed but come with a risk.

"It's risky for the dealer, not the consumer," Jackson explained. Customers who've driven away with cars would be able to keep them even if the dealer doesn't receive the funds, he said.

In general, eligible cars have to be 25 years old or newer and get less than 18 miles per gallon. For more information on the CARS program, go to CARS.gov.

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