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.


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

Map of pertinent addresses

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