The government is now punishing several car dealerships that violated the "Cash for Clunkers" rules, nearly a year after program launched. The violations occurred partly because the government was unprepared to deal with the crush of Americans who took advantage of the two-month initiative last summer, according to a recent report.
"Cash for Clunkers" was the highly-touted government program that let drivers trade in their old, clunky, gas-guzzling cars in exchange for rebates to help purchase more fuel-efficient ones.
People across the country leapt at the opportunity to unload their old cars - many more people than the government anticipated. Because of that, key documents and paperwork went missing or were filed incorrectly - and without the right paperwork, up to $94 million in rebates for the "Cash for Clunkers" program were initially ineligible.
The National Highway Traffic Safety Administration (NHTSA) has since been investigating several dealerships involved in the program - and nine have already been fined.
"With limited time to plan and prepare for CARS implementation, NHTSA based program decisions on certain assumptions that proved to be incorrect," the April report, from the Department of Transportation's Office of the Inspector General, reads. "For example, in determining staffing levels needed to process transactions, NHTSA assumed dealer requests for payment would occur at a constant rate of 3,000 per day. In the first 10 days, however, NHTSA received more than 224,000 requests-more than 7 times what it expected."
When the report came out in April, almost $94 million in rebates were initially ineligible because of lost or inaccurate paperwork. But that $94 million was actually only about 3 percent of the total program - and NHTSA says that upon further review, the claims hold up, and that $94 million is now accounted for.
Individual auto dealers, however, were investigated for allegedly violating some rules of the program.
NHTSA told Fox there have been 10 "Notices of Violation" to dealerships that violated the program's documentation rules, and nine of the dealers have been given a total of $71,500 in fines so far. 18,915 dealers participated in the "Cash for Clunkers" program around the country.
The government is continuing to investigate.