Sadly the C4C program was a disaster from the beginning! The rules were confusing, EVERYTHING was subject to audit, although I never heard of anyone being audited. The website that dealers were required to use and the government spend millions on, didn't work, it was overloaded from day one. My sales manager came into the office at 2 AM to enter information on the 4th or 5th day, because it was the only time we could get on the website without it crashing.
We were very careful to follow the very complicated rules, but I know of several dealers that just made it up as they went and sold more cars than we did, but I wasn't going to take that chance. Most of the cars we traded in were not worth anywhere near the $3500 or $4500 that the C4C paid for them. Most were junkers, the disposal was a joke, lots of guys sold parts off of them, we were supposed to credit the customer anything over a certain amount if we got more than $XX for the scrap. Lots of rules that lots of folks followed and lots of folks didn't, bottom line is we sold a few cars that we might not have sold until the following months.
And we were giving the customers $4500 in most cases and not knowing if we were going to get reimbursed!! That's a big risk on a Ford Focus with an $800 margin!