Published: August 04, 2009 10:56 pm      

‘Cash for clunkers’ program

CUMBERLAND — While the new federal government Car Allowance Rebate System is bringing more people to the car lot, there remains the question of whether the government is fully ready to handle the response from consumers participating in the “cash for clunkers” program.

“It’s been almost overwhelming,” Mark Shaffer, sales representative for Kenny Ross Chevrolet Cadillac in Somerset, Pa., said. “Dealers are going into this kind of blind because the government is setting it up. We’re kind of worried if we’ll get paid back. The cars we’re getting are the government’s cars. ... We’re trying to see if they will issue more money for this.”

Shaffer said the program has been, overall, very good for Kenny Ross and that they’ve sold about 25 or 30 cars by participating in the program. However, some people brought in vehicles that do not qualify, and the dealership has had to tell them that their vehicles get gas mileage that is too good to meet program specifications.

The biggest focus of the program, he said, is to get the SUVs and trucks off the road.

Cars must be within 25 years old to qualify, and the car being purchased or leased must be new. Either the car bought or sold can be foreign or domestic.

Greg Diehl, owner of Diehl’s Ford in Grantsville, said cash for clunkers is providing some definite benefits for the auto industry and the related businesses. However, it is leading to some unusual hours for Diehl’s employees. He said that the federal Web site is so backlogged with requests for authorization of the vehicles that an employee has to come in at 3 or 5 a.m. to get the submission forms processed outside peak business hours.

Rick Livengood, sales manager for Team One Auto Mall in Oakland, said his company has resorted to the same thing, but that overall, the new program is working out well.

“The ones we’ve done so far that have been approved, 50 to 60 percent said they wouldn’t have traded on a new vehicle if it wouldn’t have been for (CARS),” Livengood said. “We’ve been just asking them. It’s making a difference. ... We’re pleased, other than the submission system. We’re pleased with the response. It definitely brought more people in the doors than what we normally would have seen.”

Fearing that the funding will not be renewed, some dealerships have temporarily put a stop to accepting the trade-ins for the program.

“It’s going great, but we are not doing it at the present because we don’t know what the status of the funding is,” Tim Wolfe, general manager at Shaffer Ford in Cumberland, said. “The ones we’ve done, they say we’re going to be paid. The Web site keeps crashing. The response has been overwhelming. I’m going to guess that we have 30 customers on hold until I can get my money.”

He said that if dealerships knew they had a set number of cars that would receive the $3,500 to $4,500, there wouldn’t be concerns over the pending funding.

There has been some criticism of the program because the cars must be scrapped once they are sold to the government. Shaffer said that it is a shame when some of the vehicles would still be useful to people who cannot afford to buy one. He said that it could help stimulate the economy as well, ensuring that some people would have a means to get to work who might not otherwise.

Overall, Wolfe said, the situation has been a “win-win for everybody,” as people are getting thousands of dollars for their cars that might be worth only $25 to $50.

Contact Sarah Moses at smoses@times-news.com.