Friday Jul 31 2009
"Cash for Clunkers" gets weekend reprieve
By: Andrew DiLuccia, Journal Motoring Editor
Federal subsidy program for new cars continues, boosts local business
For those who thought they missed out on the chance to get rid of their high-mileage, inefficient vehicles, looks like you’re in luck. The federal “Cash for Clunkers” program, which gives car buyers a subsidy of up to $4,500 to trade in their old car for a more fuel-efficient vehicle, is going to continue — for now. After Transportation Secretary Ray LaHood reported that the Car Allowance Rebate System (CARS) was running out of the $1 billion the program had in the first week, the Associated Press reported Friday that the House approved $2 billion more for the program, and the Senate is supposed to take action on a similar bill early this week. “We wouldn’t have done it without the deal, we just couldn’t’ pass it up,” said Jerry Wilmoth of Rocklin, who was trading in a 1995 Oldsmobile Aurora for a new Toyota Corolla at Magnussen’s Auburn Toyota on Friday. “Last night it was canceled, today it’s back on.” With the prospect of an extension, local dealerships said they are honoring the program throughout the weekend and will continue to it, as long as there is proper funding from the government. “We’re excited about the program and we look forward to people coming on our lot this weekend,” said Nikole Neronde, sales manager for Auburn Ford Lincoln Mercury. Since the inception of the program last Friday, local dealers have seen an uptick in on-the-lot traffic, and for some the business in conjunction with the program has been brisk. Magnussen’s Auburn Toyota reported selling 30 cars through the program during its first six days. “It’s hugely successful. Of the 86 new cars (sold for the month) we have 30 of them that were from the program, that’s 35 percent for the month, that’s a good push,” said David Harrison, general sales manager for Magnussen’s Auburn Toyota. Auburn Honda has seen similar sales numbers through the federal program, and will continue with the program when payment by the government is secured. “As long as the money is available, we will be participating — we’ll do it,” said Jim Hitchcock, general sales manager for Auburn Honda. “We will do it as long as the government says that it’s OK.” Domestic dealers are also seeing an increase, including Magnussen’s Dodge Chrysler Jeep in Auburn, which on top of the government subsidy is offering up to another $4,500 through Chrysler, thus giving buyers up to $9,000 in credits. Mike Crabb, general manager of Dodge Chrysler Jeep, said that roughly 65 percent of sales recently have been through the federal program. “I haven’t seen this much activity in any type of promotion, whether it was a factory-type situation with a rebate or the first real government intervention into incentives for vehicle sales, since right after 9/11 when automakers introduced 0 percent financing for the first time,” Crabb said. “It’s really that much of a stir.” However, the program has put a stress on dealers because there is much more paperwork to be filled out for these transactions. And the dealers are concerned about when they will receive their money from the federal government for these subsidies. “Currently, it’s been gut-wrenching dealing with the government’s Web sites and registration sites,” said Stuart Snyder, general sales manager for Gold Rush Chevrolet in Auburn. “How quickly will we get our money?” But Snyder also pointed out, that despite busy government phone lines and slow Web sites, the program has helped and it’s doing what it’s supposed to do. Gold Rush, which also sells Subaru products, has seen a growth in traffic to its lots and business has increased. With such a demand by consumers, some dealerships across the country are experiencing decreased inventory due to the program. Neronde said Friday that she had received calls from as far away as Oklahoma and Iowa from dealers looking for vehicles. Inventory worries might continue, and maybe surface locally, if the “Cash for Clunkers” program continues past the weekend. “We’ll probably do another 20 (sales this weekend),” Harrison said. “People didn’t believe it would go so quickly.” Andrew DiLuccia can be reached at firstname.lastname@example.org. The Associate Press contributed to this report. __________ "Cash for Clunkers" Facts — Your vehicle must be less than 25 years old on the trade-in date — Only purchase or lease of new vehicles qualify — Generally, trade-in vehicles must get 18 or less MPG (some very large pick-up trucks and cargo vans have different requirements) — Trade-in vehicles must be registered and insured continuously for the full year preceding the trade-in — You don’t need a voucher, dealers will apply a credit at purchase — Program runs through Nov 1, 2009 or when the funds are exhausted, whichever comes first. — The program requires the scrapping of your eligible trade-in vehicle, and that the dealer disclose to you an estimate of the scrap value of your trade-in. The scrap value, however minimal, will be in addition to the rebate, and not in place of the rebate. — Courtesy Car Allowance Rebate System Web site, cars.gov.