Feds moving the cash-for-clunkers goalposts

Many people who thought they were eligible to benefit from "Cash for Clunkers" rebate and made a deal for a new car out this week found that they are not. It seems that just before the program was to go into effect on July 24 the EPA changed its fuel efficiency ratings on many models. According to CNN Money:

...as part of the official launch, the EPA conducted "quality assurance and quality control effort regarding fuel economy calculations on more than 30,000 vehicle model types spanning the past 25 years," according to an e-mail sent by EPA spokesman Dale Kemery.

As a result, eligibility for roughly 100 vehicles was affected, Kemery wrote. However, roughly equal numbers became newly eligible and newly ineligible.

Since it is the National Highway Traffic Safety Administration that administers the rebate program, one might wonder if one part of the Government knows exactly what the other is doing. This is particularly the case here since the benefits were retroactive to July 1. Thus dealers were entering into agreements with customers based on the published MPG figures found at http://www.fueleconomy.gov/ and waiting until July 24 to file for the rebate itself. When those published figures changed without warning,

What has been the Federal Government's response when the published mileage figures changed without warning just as it became possible to file for a rebate check? Take a painkiller and call us in the morning.

They should call our attention to it," said Rae Tyson, spokesman for the NHTSA. He did not promise, however, that the agency would bend the rules.....

...Dealers who entered into agreements with customers before July 24, based on a fuel economy figure listed at fueleconomy.gov, have only themselves to blame, said Tyson.

"We made it very clear that they would be holding themselves out to some risk if they consummate a deal before the program officially begins," Tyson said.