Dealers cash in on ‘clunkers’

BY TODD L. DISHER
Frontiersman
Published on Saturday, August 8, 2009 6:54 PM AKDT

WASILLA — A U.S. Congress vote Thursday means a stimulus for at least one local industry.

Before the senators left for their August recess, they approved an additional $2 billion for the Car Allowance Rebate System. The program — commonly known as Cash-4-Clunkers — rewards drivers with a $3,500 to $4,500 rebate for trading in their used car for a new, more fuel efficient model.

When the program was initiated on July 27, the initial $1 billion in government funding ran out in four days. The new dose of cash is projected to keep the program alive through August.

ROBERT DeBERRY/Frontiersman Peter Chadbourne looks in the window of a new vehicle at Kendall Ford in Wasilla on Saturday afternoon. Chadbourne is considering taking advantage of the federal Cash for Clunkers program because he can get more than the $1,500 book value for his Ford Explorer.

That’s good news for Mike Morris, the general manager of Kendall Ford of Wasilla. Sales of cars, pickups and SUVs were up at all the Kendall Auto Group’s dealerships across Oregon, Idaho and Alaska.

He said his dealership became busy soon after the program started. They sold about 40 cars in the first week of the program, an increase of around 25 percent over prior weeks.

Just down the Parks Highway, Lithia Chevrolet of Wasilla is feeling the same boon. Robert Sacks, director of community relations for Lithia Motors, Inc., did not have specific numbers for the local dealership. But he said customers have been “pouring in and grabbing cars left and right” across the country.

Sacks said the initial bugs in the system have been worked out after the massive response to the program overwhelmed the government’s tracking system. There was some question as to whether the rebates would come within the mandated 10 days after filing.

The initial rebates are flowing in, and everything is set for the new round, Morris said. It’s easier to file the necessary paperwork, and there is more understanding about what qualifies and what doesn’t, he said.

While Sacks and Morris directed drivers to the government’s website — www.fueleconomy.gov/cars — for the complete list of regulations, they offered some general guidelines.

To qualify as a “clunker,” a car must be at least three years old but not more than 25 years old. The owner must have proof of ownership for at least one year prior to trade-in and a record of continuos insurance. The specific mileage requirements vary by size of vehicle.

Passenger cars have to get a combined 18 miles per gallon or less on the federal fuel economy guide to qualify as a trade-in. The new car has to get 22 miles per gallon or better, and the amount of rebate is determined by the mileage improvement. For example, Morris said, a 4-mile-per-gallon improvement qualifies for a $3,500 rebate, and a 10-mile-per-gallon is required for the full $4,500.

The guidelines for pickups, SUVs and large vans are broken down by size into category 1, 2 or 3. Each category has different requirements, but all are laid out on the government’s website.

Morris and Sacks both said the other restriction on what drivers could take out of the lot was what was in the lot. A vehicle identification number has to be assigned to the application, and the first round of funding was gone before new cars could be built to the buyer’s specifications. Dealers can assign a VIN of a car at another dealership or in transit, but buyers might have to settle for model without the exact package they are looking for.

Despite all the restrictions, the dealers are looking forward to the new round of money to clear out the excess inventory on their lots.

Contact Todd L. Disher at todd.disher@frontiersman.com or 352-2252.

Comments

4 comment(s)

    jp wrote on Aug 18, 2009 7:52 PM:

    " and now the government is not paying the dealers the money.
    what a great program!!!!! "

    schnizzle fo nizzle wrote on Aug 10, 2009 4:56 PM:

    " I don't know about you, but I am waiting for my stocks in GM ( government motors ) to start kicking in so I can kick back and reap the benifits! "

    Disgusted wrote on Aug 9, 2009 9:04 PM:

    " My chilren and grandchildren will enjoy paying China back for the money borrowed to pay for this misguided program. Our politicians are scum pure and simple. "

    allisaw wrote on Aug 9, 2009 10:45 AM:

    " i love the idea of buying everyone else's p.o.s., great idea obamanation. on the street you and i would'nt do that but the gov't is starting to tell us how to spend our money...wake up people, it's called communism. "

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