Cash for Flunkers

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Published March 12, 2014

| FOXBusiness

General Motors (GM) is now offering $500 cash back to people who bought its recalled cars -- to use if they want to buy or lease a new vehicle -- as the automaker faces multiple government probes into why it failed to notify consumers in a timely fashion of ignition problems in a number of popular vehicles that are alleged to have caused the deaths of at least 13 people and dozens of crashes.

GM says the “allowance” is for customers who want to trade in their car or buy a new one; the new offer is effectively only through April 30, however. The besieged carmaker disclosed the cash back deal in a filing with the National Highway Traffic Safety Administration.  

A federal prosecutor in New York has launched a criminal investigation into General Motors'  handling of the car flaw that resulted in the fatalities. 

General Motors is said to have known a decade ago about problems with the ignition switches  of the popular models, including the Chevrolet Cobalt and HHR, Pontiac's G5 and Solstice, and Saturn's Sky and Ion. 

The crisis is the first test of GM’s new CEO Mary Barra, who ran the carmaker’s product development division. GM says it is cooperating with authorities.

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