Some car dealerships have a lousy reputation in the honesty and integrity department, and often the rep is well earned. It's unfortunate for the honest dealers out there, but every time a slimy story surfaces, it casts a bad light on the entire business of selling cars. With Cash for Clunkers adding over 300,000 sales in just a few weeks, some issues were bound to occur, and it appears that consumer advocates have turned on the black lights at the roach hotel.

Consumer Action in San Francisco is among the groups that's complained to the federal government about a questionable C4C practice that is reportedly being carried out by some dealers. Angry customers have reported that dealers are demanding they sign waivers relieving the dealerships of any financial risk from C4C deals in the event that a trade-in is rejected by the federal government for its rebate. In one case, a woman in South Carolina signed one of the agreements, and when the vehicle she turned in didn't qualify, the dealer reportedly demanded $2,500.

These contracts are being issued at some dealerships in spite of a government advisory stating that consumers are not required to sign such agreements. Dealerships say that the forms have become necessary due to the slowness of the government in reimbursing the C4C money.

Consumer Action told the LA Times that it has only seen "20 or 30" complaints so far out of 300,000 C4C transactions, so it's difficult to determine how wide-spread the matter actually is. Chances are that far more customers have had to sign the forms than that, though, as the majority of C4C transactions are likely being approved by the government, rendering the documents irrelevant.

It's also not entirely accurate to state that dealers are "forcing" customers to sign the forms, considering the fact that car buyers have every right to walk away from the deal instead of signing the forms. What bothers us is that dealers should be all too aware of which vehicles qualify under C4C, and customers are depending on them to get these matters right. After all, it's not like the customer can ask for their vehicle back after it's engine has already taken a Sodium Silicate bath.

[Source: LA Times | Photo by Ethan Miller/Getty]

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