Global Automotive Technology :: A Complete B2B, Media Portal for Automotive Industry

Share |
Cash for Clunkers' spikes local auto sales
User Rating: / 0
PoorBest 
Written by James Monteleone   
Tuesday, 25 August 2009
FARMINGTON — Drivers of old gas-guzzling vehicles who received up to $4,500 in government rebates toward the purchase of new cars weren't the only ones to benefit from the "Cash for Clunkers" program that ended Monday.

San Juan County car dealers say the program renewed buyers' interest, bringing potential customers back into showrooms regardless of whether their old cars qualified with the government trade-in program that began July 1.

Bringing buyers back is a significant feat for local dealerships, many of which previously experienced a sharp decline in sales as the economy weakened.

"It certainly created a tremendous amount of interest (and) pulled some people off the sidelines and brought them into the market now," Performance Auto General Manager Jay Steigelman said of Cash for Clunkers. "I would say the program has created a lot of activity. I think it's been good for our challenging times in our industry."

The federal program was designed to provide an incentive for consumers to replace old gas-guzzlers with new fuel-efficient cars that likely will cut down on regular gasoline costs while reducing heavy vehicle emissions common among older vehicles. An added benefit came on the behalf of dealers and automobile manufacturers, encouraging new sales that cut dealer inventory surpluses and put some car factories back to work in response to the increased demand.

When first announced in June, Webb Chevrolet Toyota estimated six to 12 old cars.

might be traded in through the Cash for Clunkers program, said Grant Allred, the Webb general manager.

"We did that in the first week," Allred said.

The dealership took in 49 clunkers through the program, cars that are required to be scrapped to qualify for the government funds.

But new car sales in July and August reached beyond consumers looking for a government rebate.

Webb Chevrolet Toyota estimates as many as 79 sales came as a result of the program, many purchased by consumers whose old cars didn't qualify for the clunkers program but chose to purchase a new car anyway, Allred said.

Advantage Dodge Chrysler Jeep had a similar experience drawing increased sales in August by attracting potential customers, regardless of whether their car met the 18 miles per gallon fuel-efficiency maximum allowed to qualify.

"From the stuff I've seen, it helped us and it helped us quite a bit," said Advantage General manager Steve Melloy. "It just created a lot of activity and a lot of traffic. A lot of people coming in and looking at cars, some of (whom) didn't have a qualifying car."

The Cash for Clunkers program wasn't entirely smooth, dealers said. Two months into the program, none of the car sellers reported being repaid by the government for the clunker rebates, which were given to consumers at the dealers' expense with the hope of being reimbursed.

Gail Paulson-Hanson, owner of Hanson Honda, said she ended her dealership's participation in the program on Aug. 14 after accepting 17 clunkers without receiving $1 in government repayment.

"I said I am not going out any further because it's my money, and I wasn't willing to take any more risk," she said.

The dealership, however, remains optimistic the federal government will reimburse all rebates after the deadline to file Cash for Clunkers claims by Monday afternoon, Paulson-Hanson said.

Some area dealers ended participation in the program on Saturday to ensure the complex rebate paperwork could be completed in time for the Monday deadline. Other dealers continued to accept clunker trade-ins, confident paper work could be quickly completed despite ongoing challenges with the government Web site overwhelmed by the number of logged-on dealerships.

A month of successful sales came with a warm welcome after seeing car buying dramatically drop in the Farmington area all year, dealers said.

"This month will be the best month we had all year," the Performance Auto general manager said. "Mostly I'd say a lot of the surge this month is attributable to the clunker program.
Comments
RSS
Only registered users can write comments!
A Product of IT Mahal Pvt.Ltd.

All rights reserved."

 
Global Automotive Technology :: International Media Support For Automotive Industry

Click Here to Advertise