Final weekend of clunkers program draws big crowds

EMILY FREDRIX / AP Business Writer

From Vermont to California, exhausted but appreciative car dealers watched their lots grow empty as crowds rushed to trade in gas guzzlers during the final weekend of the popular Cash for Clunkers program.

The hectic pace of the $3 billion rebate program accelerated in the final weekend, after the government announced the program would end at 8 p.m. EDT Monday, two weeks earlier than expected.

Adding to the urgency, some dealers had said they would stop Cash for Clunkers sales even earlier to make sure the government reimbursed them for the rebates — or because they didn’t have enough eligible cars left.

In the final hours, customers streamed in.

“We thought about it a couple weeks ago,” said Annette Palmer, 51, at Town and Country Honda in Berlin, Vt., on Saturday with her husband. They hoped to trade in a 1999 Jeep Grand Cherokee for a Honda CR-V.

“We kind of dragged our feet. Then we heard it was closing and we picked up our feet and ran,” she said.

Though short of some new models, such as the Ford Focus, Honda Civic, Toyota Corolla and Nissan Altima, many dealers were still selling as many cars as they could before Monday night’s deadline.

Standing outside one of his Hyundai dealerships in Appleton, Wis., John Bergstrom said customers traded in 100 clunkers throughout his fleet of 20 dealerships on Saturday and 100 the day before. They were his two biggest sales days during the clunkers program.

“That’s about as good as it gets,” Bergstrom said. “It’s going out with a bang.”

In all, Bergstrom said his dealerships — whose brands include Ford, GM and Toyota — sold 800 cars during the program, boosting sales 30 percent. He had to bring in extra staff to deal with the paperwork, but the sales were worth the hassle, Bergstrom said.

At Universal City Nissan in Los Angeles, Alberto Vasquez said keeping up with the pace of the program has taken a toll on employees. Some labored past midnight to wrap up last-minute deals.

“Are we tired? Definitely,” said Vasquez, the dealership’s director of training. “But it’s also bittersweet, because we’re happy that we’re selling cars.”

The dealership has sold more than 700 vehicles through the program and brought in extra staff to help enter information on the government’s reimbursement Web site.

Cash for Clunkers has been wildly successful in spurring new-car sales and getting gas-guzzling models off the road, though some energy experts have said the pollution reduction is too small to be cost-effective. Customers receive rebates of between $3,500 and $4,500, depending on the improvement in fuel efficiency from their old vehicle to their new one. As of early Friday, nearly half a million cars had been sold through the program.

But the new sales left many dealers worried about not being reimbursed by the government. As of Friday, dealers had been reimbursed for just a small fraction of the billions in sales.

Some dealers chose to stop participating over the weekend so they could have enough time to process and file the paperwork, including AutoNation Inc., the nation’s largest auto dealership chain.

At Toyota Direct in Columbus, Ohio, employees were told to double- and triple-check paperwork so it wouldn’t be rejected for reimbursement, said Jim Collins, the dealership’s assistant general manager.

Sales picked up on Saturday, though the dealership had only 20 new cars eligible for sale under the program. Sales employees sometimes jogged paperwork into the manager’s office to keep up with the pace.

The dealership won’t take any new sales on Monday so it can be assured of reimbursements, Collins said.

“We have quite a bit of paperwork, but is it worth the selling of a car right now? Absolutely,” he said. “We like to sell cars. That’s what we’re in business to do.”

Martin Main Line Honda in the Philadelphia suburb of Ardmore stopped its Cash for Clunkers sales at noon on Saturday. But by late afternoon there were still groups of people wandering the lot.

General sales manager Michael Freeman said the program had been “overwhelming,” with 115 clunker sales and big surges in customer traffic at the start and now at the end. He’s aiming to get the final stack of paperwork filed before Monday’s deadline.

“I have people upstairs, that’s all they’re doing — paperwork,” he said. “The backlog is a nightmare, and it’s starting to be a nightmare at the end.”

Customers were feeling the urgency, too.

In Appleton, Wis., April DeKeyser looked at her new Mazda 3 2010 and still had trouble accepting that it was hers.

The 22-year-old nurse from Brussels, Wis., had wanted to trade in her Chevy S10 truck as soon as the clunkers program began. But she had a hard time finding the car she wanted and had to run to numerous dealers.

DeKeyser said she knew she had to get the rebate this weekend. Without it, she wouldn’t have bought her new car.

“I would have waited,” she said. “Basically, I would have driven the other vehicle until it died.”

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Associated Press writers Alex Veiga in Los Angeles, Andrew Welsh-Huggins in Columbus, Ohio, Ron Todt in Philadelphia and David Gram in Berlin, Vt., contributed to this report.

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AutoTrader.com sees big jump from ‘clunkers’

The Chevrolet Camaro claimed the No. 1 spot on AutoTrader.com’s most viewed new vehicles list for the third month in a row, topping off what has become one of the first positive months for new car sales in over a year.

Cash-for-Clunkers brought consumers on-line and into showrooms in July to look for cars, reflected in AutoTrader.com site traffic of 15.3 million unique visitors to the site during the month of July. July marked the seventh month in a row that AutoTrader.com has seen its unique monthly visitor count top 15 million, the company said.”We have been waiting for the pent-up demand for new vehicles to uncork all year, and Cash-for-Clunkers has provided the jolt the industry needed,” said AutoTrader.com President and CEO Chip Perry. “Consumers have been turning primarily to the Internet to research information about cars and prices, and that research is finally being put into action as these shoppers turn into buyers at dealerships across the country.”

Among new vehicles, the all-new Chevrolet Equinox saw an impressive 197% increase in views, moving it from 99th to 18th year-over-year. Similarly, the recently redesigned Ford Fusion saw an increase in views of 28%, enough to move the midsize sedan from 35th to 16th overall. Ford also saw an increase in asking prices for the new Fusion of 12%, with the average price of vehicles listed on AutoTrader.com being $24,798. This compares well the Fusion’s chief competitors, the Honda Accord and Toyota Camry, which had average listing prices of $25,217 and $24,487, respectively.

Continuing to look at Ford vehicles, the new F-250 full-size pick-up, which saw a severe drop in sales last July due to record-high $4 per gallon gas, also saw a significant year-over-year increase in consumer activity, with views increasing 87%. Finally, Kia saw one of the largest increases in views among brands as a whole, as consumer activity around vehicles such as the newly-introduced Soul crossover and the new Forte compact sedan helped move the brand to its first-ever appearance on the top 10 Most Viewed Manufacturers list.

“With demand for many cars high now, supplies of vehicles at many dealerships have run short,” said Perry. “For consumers looking to now take advantage of the CARS legislation by purchasing a popular model such as one of these, turning to AutoTrader.com to locate a dealer with the exact new vehicle of their choice is certainly the smart way to go.”

Used & CPO Car Activity

Among used and CPO vehicles, the Ford F-150 saw a 31% gain to become the most viewed used vehicle, while the BMW 3-series once again topped the list of most viewed among CPO vehicles. More notably, prices for used vehicles across a variety of segments rose, with trucks seeing the largest jumps from last year’s lows. The biggest gainer was the Chevrolet Tahoe, which saw an increase in average asking price of 20% compared to July of 2008.

“Excepting last summer’s unusual selling situation brought about by record high gas prices, the consumer demand for larger vehicles such as SUVs has generally continued unabated,” said Perry. “Though we are beginning to see a gradual shift in consumer tastes to smaller vehicles, it will be a while before we see many Americans ready to abandon their bigger vehicles entirely.”

For more information visit: www.Autotrader.com

White House reviewing ‘cash for clunkers’ program

WASHINGTON – The White House said Thursday it was reviewing what has turned out to be a wildly popular “cash for clunkers” program amid concerns the $1 billion budget for rebates for new auto purchases may have been exhausted in only a week.

Transportation Department officials called lawmakers’ offices earlier Thursday to alert them of plans to suspend the program as early as Friday. But a White House official said later the program had not been suspended and officials there were assessing their options.

“We are working tonight to assess the situation facing what is obviously an incredibly popular program,” White House press secretary Robert Gibbs said of the Car Allowance Rebate System. “Auto dealers and consumers should have confidence that all valid CARS transactions that have taken place to date will be honored.”

Gibbs said the administration was “evaluating all options” to keep the program funded.

A Transportation Department official said the department was working with Congress and the White House to keep the program going. The administration officials spoke on condition of anonymity because they were not authorized to speak publicly about the discussions.

The CARS program offers owners of old cars and trucks $3,500 or $4,500 toward a new, more fuel-efficient vehicle.

Congress last month approved the program to boost auto sales and remove some inefficient cars and trucks from the roads. The program kicked off last Friday and was heavily publicized by car companies and auto dealers

Through late Wednesday, 22,782 vehicles had been purchased through the program and nearly $96 million had been spent. But dealers raised concerns about large backlogs in the processing of the deals in the government system, prompting talk of a possible suspension.

A survey of 2,000 dealers by the National Automobile Dealers Association found about 25,000 deals had not yet been approved by NHTSA, or nearly 13 trades per store. It raised concerns that with about 23,000 dealers taking part in the program, auto dealers may already have surpassed the 250,000 vehicle sales funded by the $1 billion program.

“There’s a significant backlog of ‘cash for clunkers’ deals that make us question how much funding is still available in the program,” said Bailey Wood, a spokesman for the dealers association.

Alan Helfman, general manager of River Oaks Chrysler Jeep in Houston, said he was worried that the government wouldn’t pay for some of the clunker deals his dealership has signed because they aren’t far enough along in the process.

His dealership has done paperwork on about 20 sales under the clunker program, but in some cases the titles haven’t been obtained yet or the vehicles aren’t yet on his lot.

“There’s no doubt I’m going to get hammered on a deal or two,” Helfman said.

The clunkers program was set up to boost U.S. auto sales and help struggling automakers through the worst sales slump in more than a quarter-century. Sales for the first half of the year were down 35 percent from the same period in 2008, and analysts are predicting only a modest recovery during the second half of the year.

So far this year, sales are running under an annual rate of 10 million light vehicles, but as recently as 2007, automakers sold more than 16 million cars and light trucks in the United States.

Even before the suspension, some in Congress were seeking more money for the auto sales stimulus. Rep. Candice Miller, R-Mich., wrote in a letter to House leaders on Wednesday requesting additional funding for the program.

“This is simply the most stimulative $1 billion the federal government has spent during the entire economic downturn,” Miller said Thursday. “The federal government must come up with more money, immediately, to keep this program going.”

Michigan lawmakers planned to meet on Friday to discuss the program.

Brendan Daly, a spokesman for House Speaker Nancy Pelosi, D-Calif., said they would work with “the congressional sponsors and the administration to quickly review the results of the initiative.”

General Motors Co. spokesman Greg Martin said Thursday the automaker hopes “there’s a will and way to keep the CARS program going a little bit longer.”

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AP Auto Writer Tom Krisher in Detroit contributed to this report.

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Dealers riding clunkers to the bank

Allure of $4,500 boost for trade-in pulls buyers into auto showrooms

By Sean Sposito, Globe Correspondent  |  July 30, 2009

Massachusetts auto dealers say the new “cash for clunkers’’ voucher program is giving them a much-needed boost in business this week.

The federal promotion – which offers buyers an instant discount of up to $4,500 when a qualifying vehicle is traded in for a new, fuel-efficient model – was rolled out over the weekend, and by yesterday dealers were reporting a jump in sales. Buyers have an additional incentive, too – avoiding the 25 percent increase in the state sales tax that takes effect Saturday.

While there have been complaints that the program is too complicated and won’t ultimately cure automakers’ ills, for now area dealers are just happy to see customers flocking to their showrooms.

“It’s the best week in several years for people in the automotive industry,’’ said Dan Quirk, president of Quirk Auto Dealerships. Quirk said the prospect of shaving thousands of dollars off the price of a car is driving up activity at his 10 showrooms.

Quirk said he usually sells about 1,500 cars a month, but expects to do significantly better in July. “We’ve probably sold 350 just this weekend, 120 through cash for clunkers,’’ he said.

Kevin Haggerty, 60, of Pembroke was shopping at Quirk Chevrolet in Braintree on Monday, hoping to trade in his 1999 Ford F-150, which he estimates is worth around $1,600, as a clunker. The Chevrolet Colorado he was eyeing had already been sold, but Haggerty expects to eventually buy a new car under the voucher program.

“I’m 90 percent sure that I’m going to make a move, unless something is too pricey,’’ he said.

Juan Banos, lead sales manager at Expressway Toyota in Dorchester, said his dealership closed about 30 cash for clunkers deals over the weekend alone. Banos said that even if the program increases monthly sales modestly, he’ll consider it a success.

“An extra 10 to 30 deals, we make at least an average of $1,000 per deal, that’s $30,000 for the dealership just in one weekend,’’ he said. “That could either make it or break it, as far as quotas go.’’

Gregg McCutcheon of Brockton said he was motivated to shop by the promise of cash for clunkers, formally the Car Allowance Rebate System, or CARS. The $1 billion program, which will run through Nov. 1 – or as long as the funds last – allows $3,500 to $4,500 trade-ins on cars that get less than 18 miles per gallon and are less than 25 years old. The money can be applied only toward new cars, and there are other restrictions.

“Cash for clunkers is what got us out here,’’ said McCutcheon, 57, after he bought a car from Mansfield Jeep-Chrysler. But McCutcheon ended up with a 2007 Chrysler Town & Country van instead of a current model.

“I’m 6-foot-6,’’ he said. “The dashboards on the new ones seemed to come out a little bit further, so I picked up a used one.’’

Not buying a new car meant McCutcheon wasn’t eligible for the CARS program, however.

Despite the upbeat moods in showrooms, some dealers said the paperwork associated with the federal program has been overwhelming. Reidar Davies, general sales manager of Prime Honda in West Roxbury, said his dealership has already written more than 40 cash for clunkers deals, but it has required a lot of extra effort.

“The paperwork is extremely, extremely rigorous and demanding,’’ he said. “It requires a ton of data entry.’’

And submitting the deals for government approval online has been painfully slow, Davies said.

Melissa Steffy, general manager at Herb Chambers BMW and Mini in Boston, said sales made with customers over the weekend are just now getting processed online.

“It’s a matrix to put these deals together,’’ Steffy said.

Even signing up to participate in the program was a headache for some dealers. Karen Aldana, a spokeswoman for the National Highway Traffic Safety Administration, said more than 20,000 of the nation’s 25,000 auto dealers have enrolled in the program. But the demand was so high that some dealers could not get onto the agency’s website, she said.

Some local auto industry officials are trying to put the promotion in perspective. With Chrysler merging with Fiat to survive, and General Motors emerging from bankruptcy propped up by $50 billion in taxpayer funds, no one is saying automakers’ troubles are history.

“It’s a $1 billion program and the money will go fast,’’ Quirk said of cash for clunkers. The funding translates to about 225,000 vehicles – just one week of sales across the country.

Sean Sposito can be reached at ssposito@globe.com.