CARS is out of gas

‘Cash for Clunkers’ funds spent

KINGMAN - The government-sponsored Car Allowance Rebate System (CARS), also known as the "Cash for Clunkers" program, has proven a rousing success. In fact, the program may have proven a little too successful - it ran out of money after just one week.

According to national reports, the U.S. House of Representatives has already passed a bill to allocate an additional $2 billion on top of the $1 billion the program has already burned through, though it remains unknown exactly when the Senate may pass a similar allocation, if it does at all.

Initially debuting July 24, the CARS program is designed to encourage new car sales by providing a $3,500 to $4,500 rebate to anyone who trades in an older, fuel-inefficient car for a new one that gets better gas mileage. In addition to providing a much-needed economic stimulus to car dealers and customers alike, the program is also meant to permanently remove some of the most egregious aging gas hogs from the nation's roads, improving the country's overall efficiency and reducing U.S. dependence on foreign oil and gasoline.

Locally, new car dealers took advantage of the week as best they could, though the semantics of the program did result in several challenges early on. Nick White, the sales manager for Martin Swanty Hyundai at 4180 Stockton Hill Road, said that while sales for July were up 70 percent thanks to the program, the online rebate-processing servers were virtually impossible to access at first.

"When the time came to submit transactions, basically everyone submitted at once," White said. "It was a nightmare. It basically died for a couple of days, and you couldn't submit anything."

Red tape

White noted that the paperwork burden for each CARS deal was immense, requiring dealers to scan up to 20 documents at a time to submit to the CARS Web site for official review by the National Highway Traffic Safety Administration, the government agency overseeing the program.

"The system is so bogged down because so many people are trying to submit claims - I've been doing them myself at night," White said. "I don't think anyone was expecting this much success in a program that's so new."

But for all the work the program requires, success is definitely the right descriptor. White noted that he sold all but one of the latest shipment of eight Hyundai Accents that arrived Monday morning, adding that if the program is renewed for another $2 billion, his biggest problem will likely be keeping his inventory on the lot.

Half-price

"I'm running out of most of my smaller, four-cylinder inexpensive cars," he said. "Essentially (between government and manufacturer rebates), you're looking at cutting the price of our base model vehicles in half. You can get a new vehicle cheaper than you can get a pre-owned right now."

The same problem goes for Tom Sissom of Colorado River Ford at 3601 Stockton Hill. Sissom's dealership was among the first in town to pursue CARS deals weeks before the program actually began, and as a result, nearly all of his entry-level inventory has been depleted.

"The program has definitely brought in quite a few deals - tons of sales tax generated - it was a pretty good program," Sissom said. "The big problem now is inventory. I'm just about out of the type of cars people were buying."

Sissom said he was aware of the government effort to put more money into the program, but added he would probably only continue making CARS-related deals through the weekend, waiting until the new funding is certain before he resumes.

"We're gonna run it through the weekend and probably take it under advisement Monday morning at a staff meeting," he said. "There's a lot of news that the Senate will probably hold this thing up."

Not everyone expressing interest in the program has met its fairly stringent qualifications, usually because their clunkers don't quite fit the NHTSA's definition. But that hasn't been a problem for Curtis Cutshaw, the general sales manager for Martin Swanty Chrysler Dodge Jeep at 2460 Andy Devine Ave.

"It's been a nice increase (in sales), but just the traffic alone it's generated has been very encouraging," Cutshaw said. "A lot of people that came in who didn't qualify ... we've actually switched them to some of our pre-owned, and they've left here very happy."

Cutshaw noted that he, too, has been informed to discontinue the CARS deals until at least Monday, when the program's fate will hopefully become clearer. In the meantime, however, he said Martin Swanty is still hoping to capitalize off his customers' excitement by offering his own incentives styled after CARS.

"If someone still wants to come in, we're going to do what we can to give them as much for their older cars as possible," Cutshaw said.