Glenwood car dealerships revved up by ‘Cash For Clunkers’ program
August 25, 2009
GLENWOOD SPRINGS – The popular “Cash For Clunkers” program is now history, having officially ended Monday night, and while buyers are driving around in new sets of wheels, area dealers are still waiting for their rebate money from the federal government.
Still, auto dealers contacted by the Glenwood Springs Post Independent praised the program for providing a boost to their bottom lines in the midst of the worst economic downturn since the Great Depression.
“Yeah,” said Greg Hire, used car manager for Berthod Motors in Glenwood Springs, describing the program that resulted in “20-something” deals at Berthod’s lot.
“A lot of people were thinking they needed a new car but just sitting, waiting, because of the economy,” Hire continued. “I think this sort of jump-started the market.”
Some critics argued that the program, which offered $3 billion in federal rebates to those who turned in qualified “clunkers” and drove off the car lots with a newer cars that get better gas mileage, was mostly attracting those would have bought cars eventually. But Hire differed with that assessment.
“I think it brought in new people,” he said, meaning people who might not have purchased a new car any time soon without the incentive of the federal program.
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And, he said, even for those who brought in cars that did not qualify as “clunkers,” such as cars older than 25 years or in other ways not acceptable, “We were still able to give them some value for their car, and put them in a newer car.”
But Steve Zeder, general manager at Bighorn Motors in Glenwood Springs, remains skeptical.
“It did well,” he conceded about the program. “What I can’t tell you is whether those are sales we would have made anyway in a month or two.” He said his dealership sold “just over 40” cars thanks to the CARS program.
Over at Elk Mountain Motors in West Glenwood, Ronny Ullrich, sales manager of the Volkswagen side of the shop, said the dealership sold just under 20 cars, mostly VWs but some Audis, and predicted that sales will continue to be better than before the CARS program.
“I think it actually created a little bit of a hype,” he said. “We sold many, many used cars without using the CARS program.” He expressed the hope that car buyers will continue to come in with trade-ins.
U.S. Transportation Secretary Ray LaHood announced on Aug. 20 that after a wildly successful run, the cash for clunkers program was to come to a close on Aug. 24 at 6 p.m. Mountain Time.
“This program has been a lifeline to the automobile industry, jump-starting a major sector of the economy and putting people back to work,” Secretary LaHood said. “At the same time, we’ve been able to take old, polluting cars off the road and help consumers purchase fuel efficient vehicles.”
As of Monday, the CARS (Car Allowance Rebate System) program has recorded more than 650,000 dealer transactions, according to a story on the Associated Press news wire.
As a result of the program, according to U.S. officials, automotive inventory has been depleted and both General Motors and Ford are ramping up production, adding shifts and rehiring laid off workers.
The program has provided rebates of up to $4,500 when people turned in their clunkers for fuel-efficient vehicles. Most consumers have turned in trucks and SUVs in exchange for passenger cars, with an improved gas mileage of about 60 percent, according to government estimates.
The Obama administration set a Tuesday deadline for dealer paperwork to allow car dealers and buyers plenty of time to finalize purchases and submit applications for rebate. But dealers around the country were halting sales based on the program by the end of last week, including the dealers in Glenwood Springs.
The legislation passed by Congress to create the program mandated that all the vehicles traded in be destroyed to get them off the road, but Hire said Berthod is holding on to its clunkers until it gets the rebate check, which he said is “pushing a hundred-thou [$100,000]” in value.
Once the dealer gets the government rebate check, the clunker engines are to be disabled by running a sodium-silicate solution through them, which causes them to freeze up. They then will be either shredded by special, mobile machines or sent to salvage yards to be crushed.
Other than the engines, Zeder said, the cars can be dismantled salvaged cars, which, according to Hire, is another aspect of the economic stimulus represented by the CARS program, because it means work for auto salvage companies as well as the steel industry.