SALEM, Ore. — Oregon’s attorney general says the popular Cash for Clunkers program required that car dealers pass along the scrap value of old cars to the customers who traded them in.
In most cases that’s about $200 per car, and Attorney General John Kroger concedes dealers are entitled to keep as much as $50 as a disposal fee.
He announced Thursday that two Portland-area dealerships have agreed to settle disputes by paying 236 customers a combined $43,571 for the scrap value of trade-ins.
Kroger said he’s warned more than 200 other dealerships they must provide the scrap value refunds to customers who haven’t already received them.
However, Greg Remensperger, executive vice president of the Oregon Automobile Dealers Association, disagrees with Kroger’s interpretation. He contends the federal law governing the program left disposition of the scrap value up for negotiation.
“It’s got me quite flummoxed, because I don’t agree with his position and I don’t think he’s right,” Remensperger told The Register-Guard.
More than 8,500 Oregonians participated in the nationwide program that ran from July 27 to Aug. 25 and generally required that new vehicles get better mileage. It required the old trade-ins to be destroyed in exchange for either $3,500 or $4,500 rebates.
A spokeswoman for the National Highway Traffic Safety Administration said the value of the scrap is not a set value and is negotiable.
“It varies from vehicle-to-vehicle and may depend on the market,” Patricia Oladeinde told KATU, adding dealers were required to give a good faith scrap value estimate to the consumer and were entitled to keep as much as $50 for administrative costs.
Oladeinde said she wasn’t aware of any other attorney general taking up the matter with auto dealerships, although the federal agency has received questions on the topic.
“I will be the first to concede the law could have been written better,” said Kroger spokesman Tony Green. “But I think it’s pretty clear that it says dealers are entitled to up to $50 as an administrative fee, and that clearly indicates the remainder belongs to the customers.”
Customer Leon Cox of Eugene said he received a scrap-value credit when he negotiated a clunkers deal at Kendall Toyota.
“I felt I was treated fairly and justly, and I was given credit toward the purchase of the vehicle,” Cox said. “It was clear to them that the salvage of the vehicle was to be applied to the purchase.”
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