Glenwood Springs car dealers seek an extension of ‘Clunkers’ program
August 5, 2009
GLENWOOD SPRINGS – Local car dealers are hoping Congress agrees with President Barack Obama that the highly popular, but unexpectedly curtailed, Cash For Clunkers program should be extended.
The program, also known as the Car Allowance Rebate System, or CARS, reportedly has burned through the initial $1 billion allocated by Congress, which offered between $3,500 and $4,500 in federal rebates to encourage Americans to trade in older, less fuel-efficient cars for new cars that get better gas mileage.
“It worked great,” said Don Gerbaz, general manager of Berthod Motors in Glenwood Springs. “Obviously it stimulated the selling of cars. We would hop back in and participate” if the program were extended.
“It’s a good deal for [car dealers],” said Glenwood attorney Susan Snyder, who went in for a deal at Vista Honda in Glenwood Springs at the last minute on July 31. “It’s a good deal for everyone.”
But the program is in limbo, thanks to logjams in processing the dealers’ applications for rebates, and uncertainty about whether all sales will be honored even if the final tally represents more than the original $1 billion fund and no more money is forthcoming.
The program’s crisis arose at the end of last week, when an unexpected surge in buying surprised the Obama administration, which had expected the fund to last through October.
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According to the Wall Street Journal, by July 30 the program had generated more than 250,000 sales nationally, although the final numbers may not be known for several days as the National Highway Transportation Safety Administration wades through oceans of paperwork.
The Obama administration reportedly has pledged to honor all sales made before the end of last week, even if no further funding comes out of Congress to keep the program rolling.
The U.S. House of Representatives has authorized an additional fund of $2 billion for CARS, but the Senate has yet to go along.
Colorado’s two senators, Democrats Mark Udall and Michael Bennet, said on Tuesday that they favor extending the program as long as it does not increase the budget deficit.
“I’ve heard from car dealers and citizens from across Colorado who say they want Cash for Clunkers continued because it’s good for the economy and for our air quality, and it helps families save on gas money,” said Udall in a written statement. “The program is paid for, it won’t add to the deficit, and I think it would be harmful to our still-weakened economy to cut it short when there is still pent-up demand to buy cars.”
And late on Tuesday there was news that Senate Republicans have agreed to not interfere with a vote on the issue; the vote could come Thursday or Friday. The Senate is due to adjourn for the August recess on Friday.
Locally, several dealerships said they made a number of sales last week and over the weekend, but they have suspended participation in the program to see if more money comes available.
Gerbaz said Berthod Motors had sold “13 or 14” vehicles, many of them General Motors Pontiacs, as well as several Jeeps, by the end of the week, and most of the clunkers were “mid-sized sport utilities, [trading for] smaller sport utilities or into a car.”
Glenwood Springs Ford has sold six cars under the program but has yet to receive a rebate payment, and like the other dealers in town is holding off on further sales until the Senate vote, according to salesman Bruce Lowery.
“We’ll do another five or six if it goes through, right now,” he predicted, but as things stand, “there was no provision for what happens if it runs out of cash. Are you [left] holding the bag, or what?”
Lowery said the dealership is currently selling 60 or 70 vehicles per month in general, about half the sales volume of “a year or two ago,” and that the Cash for Clunkers program definitely boosted traffic through their showroom.
Over at Bighorn Toyota, which sold around two dozen cars through the program by the end of last week, the most popular car leaving the showroom was the Prius hybrid.
“It was certainly an increase,” said Steve Zeder, general manager, concerning the volume of potential buyers coming through the doors.
But, he added, there was no way of knowing how many of those sales might have happened anyway, “although I know it pulled a few people forward.”
Zeder said some of his customers were from out of state or the Front Range, and showed up in his showroom while they were here on vacation because of government warnings at the end of last week that the program was running out of funds.
“In general, it’s a good program,” he said. “It’s just the administration of it that is very cumbersome, very difficult.”
Snyder turned in an early 1990s Jeep Grand Cherokee, with 180,000 miles on it, for a new Honda Civic. She said she and her husband had been thinking about making a switch anyway because “we knew this old thing [the Jeep] wasn’t going to last forever.”
When word spread that the Cash for Clunkers program may shut down for lack of funds, she said, her husband used some time off to check out the Vista showroom last Friday, “and then I came over on my lunch hour to check it out. We finalized it after work. It looked like it was a good deal, and you get a gas-hog off the road.”
She said she hopes the program is extended, and would like to see it expanded to include the purchase of used cars so that more people would be able to afford to upgrade their vehicles.