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Area car sales up under 'clunkers' program, but dealers say rules can be confusing

Sunday, August 2, 2009

Dealers are reporting increased sales but also confusion about the rules nearly a week after the "cash for clunkers" program went into effect.

"We're seeing an increase in activity and transactions, which is good for us," said Nick Underwood, general manager of Lutesville Motor Co. in Marble Hill, Mo. "Our floor traffic and phone calls have more than doubled since Monday. Everyone is wanting to know about the program.

"But there are a whole lot of people who don't understand this program," Underwood said Friday. "It's even confusing to me, and I sell the vehicles."

Congress approved the "cash for clunkers" program, formally known as the Car Allowance Rebate System, in June to boost automobile sales and help retire less efficient vehicles. Dealerships throughout the country ran ads encouraging customers to trade in their qualifying cars and trucks for a more fuel-efficient vehicle using a rebate between $3,500 and $4,500.

"The logistics of working with the government on this is maddening," said Bob Neff, owner of Ford Groves in Cape Girardeau and Jackson. He cited regulations placed on the customer, such as their trade-ins' mileage not exceeding 18 mpg, a government website used to process the rebates that did not work properly and a 136-page rule book sent to dealers only days before the program began.

Sam Barbee, president and CEO of the Missouri Automobile Dealers Association, called the entire program frustrating. He said the program has been great for the consumer but poorly designed for the dealerships.

"The government is trying to make sure the program is run the way it's supposed to be done," Barbee said. "But it's incredibly burdensome to make sure it's carried out the right way. I'd suggest that customers call the dealership ahead of time to make sure their vehicle is qualified and that the dealers are still participating in the program."

Still, "cash for clunkers" has been a productive stimulus program, said Tim Coad, who owns Brennecke Chevrolet in Jackson, Coad Chevrolet in Cape Girardeau and Coad Chevrolet Pontiac Buick Cadillac in Anna, Ill. The program has increased business at his dealerships by 15 percent, he said.

"What the government is trying to do is stimulate the economy, and this is a good way to do it," Coad said. "These are tax dollars that are being used by U.S. citizens. People are actually seeing their money being spent on something that helps them out."

From the program's onset July 26, far more drivers responded than the government had estimated by the end of the work week, exhausting the $1 billion set aside for the program.

The U.S. House of Representatives approved more money for the program Friday. The measure still awaits Senate approval, and the White House has promised that all transactions made through the weekend would count.

The program is "clearly working to boost auto sales at a critical time for our automakers, dealers, parts manufacturers and Americans employed at those businesses," Rep. Jo Ann Emerson said in a written statement. She was among those who voted 316-109 for the legislation, shifting $2 billion from a renewable energy loan program. "I hope constituents in our district are able to take advantage of this program, which is actually working, unlike so many so-called stimulus programs still on the shelf."

Neff questioned whether the government will make good on its promise to reimburse the dealerships for the rebates.

"We are gratefully making deals with customers who really are taking advantage of a great opportunity," he said. "I just hope when the dust settles everything ends up like it's supposed to."

The Associated Press contributed to this report.

bblackwell@semissourian.com

388-3628

Pertinent addresses:

206 Railroad St., Marble Hill, MO

1501 N. Kingshighway, Cape Girardeau, MO

700 E. Jackson Blvd., Jackson, MO

517 S. Kingshighway, Cape Girardeau, MO

2525 E. Vienna St., Anna, IL


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I heard that these trade-in cars are being destroyed - NO recycling possible. Seems wrong somehow...there are so many poor, unemployed ppl out there who would be grateful for a real bargain on any form of transportation. Surely, the person who told me this was misinformed?

-- Posted by mammidam on Sun, Aug 2, 2009, at 4:42 AM

Hmmm, wonder what this program is doing to the market for vehicles $4,500 and less, both now and in the future?

Possibly putting the 'hurt' on the future availability of vehicles for those dealers who specialize in older used / 'pre-owned' vehicles, and for those people shopping for these types of vehicles.

Reduced availabilities of 'junk-yard' parts will likely increase the cost of ownership for those with older vehicles - as they will be forced to choose between paying increased prices for the used parts that are left, using new 'off-the-shelf' parts, upgrading to another vehicle, or some other not-so-economical choice.

Consider that even for those vehicles getting less than 18mpg - the resulting carbon footprint may not be all that bad, relatively, if the vehicle is not driven much. Offhand, which is worse - a 10mpg vehicle driven 1,000 miles per year - resulting in a 100 gallon annual burn, or a 25mpg vehicle driven 12,500 miles per year - resulting in a 500 gallon annual burn?

Still not saying this is a bad program - just that one of Murphy's corollaries may be kicking in - that being, "every solution yields another problem". Rocking the boat with artificial market pressures, such as this clunkers program, can result in some people getting soaked.

-- Posted by fxpwt on Sun, Aug 2, 2009, at 9:49 AM

I don't think a single piece, not so much as a light bulb, from these inefficient vehicles should be resold. The intent is to remove them from service, not to provide a supply of parts to keep the other ones like them on the roads indefinitely.

Very few people, one I've ever known, are unemployed only because they don't have a car. People that want to work find a way to get there, people that don't find an excuse. You never hear of anyone doing without because they can't find a way to get, cash, or spend their welfare check.

-- Posted by malan on Sun, Aug 2, 2009, at 10:03 AM

oops - "no one I've ever known"

-- Posted by malan on Sun, Aug 2, 2009, at 10:06 AM

Ahhhh, but where is the cross-over point between keeping an older, less-efficient car on the road versus the costs of manufacturing a new car?

One source gives the following arguments - http://environment.about.com/od/environm...

"There are significant environmental costs to both manufacturing a new automobile and adding your old car to the ever-growing collective junk heap. "

"A 2004 analysis by Toyota found that as much as 28 percent of the carbon dioxide emissions generated during the lifecycle of a typical gasoline-powered car can occur during its manufacture and its transportation to the dealer"

"... don't forget that the new hybrids, despite lower emissions and better gas mileage, actually have a much larger environmental impact in their manufacture, compared to non-hybrids."

"There's much to be said, from many environmental vantage points, about postponing replacement purchases, of anything, not just cars, to keep what's already made out of the waste stream and to delay the additional environmental costs of making something new. "

-- Posted by fxpwt on Sun, Aug 2, 2009, at 4:24 PM

The pros and cons of this program have already been discussed and the "Big O", in his infinite wisdom, decided the program was a go.

Now, whether I agree with it or not, I would like to see a Federal program get executed as outlined.

-- Posted by malan on Sun, Aug 2, 2009, at 4:44 PM

When the Guberment can't plan ahead to make the Klunker program work, how do we expect them to handle health care. I think we all would be better served if the Guberment just gave all of us the money and let it improve sales of all products not just the failure of the auto manufacturerers who can not manage their business. There is no evidence this program would ever improve the environment so that is a joke. Joanne Emerson was wrong to vote for continuing this program.

-- Posted by semolover on Sun, Aug 2, 2009, at 11:56 PM

To clear up a little confusion here, you need to remember to examine every leftist policy decision, ie every decision Pelosi, Reid and Obama push through this filter. The left hates capitalism first. Their policies often make no sense because you do not understand their logic. They will screw the poor and even labor unions to meet goal #1, trashing the free market in favor of government control. Environmentalism is a favorite tool to this end.

This policy shifts power to the government-period. Dealers owe a debt to it. The car-buyers owe a debt to it. The environmentalists are thrilled. As these "clunkers" get destroyed the poor are absolutely screwed as you first commentor observed. They are then forced into being customers of public transit. Watch a large businesses scream when their bus line gets cancelled as happened this Spring in St. Louis.

-- Posted by Jim Towers on Mon, Aug 3, 2009, at 7:33 AM

These are the same people who think they can run our healthcare system.... we are in for a long hard road folks.... better get ready... enjoy the "Change".

-- Posted by abcd on Tue, Aug 4, 2009, at 12:01 AM


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