Dealers enjoy increased sales, await federal payment on trade-ins

 

 

 

Photo by Tom Tigani

Photo by Tom Tigani

By TOM TIGANI

 

 

 

 

Sunday Times Newspapers

     Though there have been a few glitches since its rollout last month, local automobile dealers are claiming success for the federal Car Allowance Rebate System, also known as CARS and even more popularly as Cash For Clunkers, which ended last week.

     “It’s a great deal, a great program,” said Paul Steel, general manager of Telegraph Dodge Chrysler Jeep in Taylor and Southfield Dodge Chrysler Jeep in Southfield. “It increased our sales and made July a good month.”

     The dealership sold all of its small cars, he said, clearing out 300 cars through the program, which ran from mid-July to 8 p.m. Tuesday after two deadline extensions earlier in the week. Sales were brisk on the Jeep Compass and Patriot, Chrysler Sebring and Dodge Caliber and Avenger models, Steel said, but even the Chrysler Town & Country and Dodge Caravan minivans and Dodge Ram 1500 pickup trucks were moving because the trade-in vehicles fell below the 18-mile-per-gallon of fuel average.

     The program offered government rebates of $3,500 or $4,500, depending on the average mpg rating of the trade-in vehicle and its replacement. Officials’ intent was threefold: to clear inventories and put people back to work; to reduce emissions, benefiting the environment; and to boost the country’s overall economic growth.

     Julie Turla, president of Fairlane Ford in Dearborn, said her dealership sold 85 new cars between July 24 and the original cutoff date of Aug. 21. Deadline for submission of information to program officials had been set at 8 p.m. Monday, but was extended till noon Tuesday and eventually 8 p.m. that evening because the government’s computers system went down for five or six hours on Monday because of the deluge of information.

     The program’s end result was positive, however, Turla said, citing Ford’s longer list of gas sippers as the key to pushing it past competitors in sales, with models including Focus, Edge, Fusion, Fusion hybrid, Taurus, F-150, Ranger and Transit Connect small van.

     “It put 13 months into a 12-month year for us,” she said. Turla’s optimistic that sales won’t fall off the way some experts are predicting now that customers have traded in vehicles they were going to get rid of anyway and pushed those sales earlier into the year rather than creating new ones.

     She said visitors to her dealership seem “more relaxed” and less worried about the future or about hanging on to their jobs than they did in the previous few months.

     The future for the dealers once the clunkers are received, however, is the same for all. Sodium silicate— known in the business as “liquid glass” — is poured into the engine to render it unusable.

     Salvagers hate it, Steel said, because it destroys potentially saleable used parts. Dealers live with it by storing the clunkers on their lots until one of a limited number of local junkyards authorized to take them can come pick them up.

     Getting paid has been a hassle as well, dealers say. Turla said she’s yet to receive a dime of the 3 billion provided by Congress to run the program. About  $2.877 billion in rebate applications were submitted by the original deadline. Steel, too, still is waiting to see federal money come his way, but both believe it will arrive eventually.

     All things considered, he said, “I thought the government did a great job. Talk about a stimulus program — that definitely got it going.

     “(Cash for Clunkers) got a lot of the old cars off the road, which is a good thing. We even had some customers who did not qualify but still bought a car.”

     There’s no way to know how many of the clunkers would have been driven into the ground were it not for the program, Turla said.

     “I think we got some brand-new customers that we never would have seen in any of our departments — sales, service, parts — it’s been a chance to build some new relationships.

     ‘We’re seeing a lot of positive interactions, a lot of people interested in buying cars. Our rebate programs are excellent, and we think it’s just going to continue to grow our sales volume.”

     Cash for Clunkers “absolutely made a great difference” and has been “a good shot in the arm” for dealers nationwide, Steel said.

     “Everybody I’ve talked to throughout the country has had good success,” he said, adding that Ford likely is the real winner because it didn’t face plant shutdowns for bankruptcy proceedings like Chrysler and General Motors.

     “We sold a lot of cars,” Steel said. “Now people have to go back to work to build more cars, which is a good thing. Now it’s up to the Big Three as we get into the third and fourth quarter, which everybody says should be strong.”

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