Clunkers law may spur car sales

Colorado River Ford swamped with inquiries from potential customers

KINGMAN - Take a good, long look the next time you drive past the Colorado River Ford dealership at 3601 Stockton Hill Road. It may be the last time you'll see the parking lot as full as it is for quite a while.

That's because Colorado River Ford is the first local car dealership to participate in the new government-backed "Cash for Clunkers" program, officially dubbed the Car Allowance Rebate System, or CARS for short.

Signed into law by President Obama on June 24, the CARS program essentially provides a rebate of $3,500 to $4,500 for anyone who trades in an old, fuel-inefficient vehicle for a new car that gets better gas mileage. The incentive is being offered both as a means of helping American motorists to purchase new vehicles in a time of financial strain, and as a way of improving the nation's overall fuel efficiency and reducing greenhouse gas emissions by taking older vehicles off the streets for good.

While the National Highway Traffic Safety Administration will not release full details of the program until its official rollout July 24, several basic criteria have been established thus far: Trade-in vehicles must be no older than 25 years, must have had a new combined highway and city gas mileage of 18 miles per gallon or less, must be continually insured and registered to the same owner at least one full year before the trade in, and must still be in driveable condition.

Trade-in vehicles can be either domestic or foreign-built, and the rebates can be used to buy or lease a domestic or foreign car, so long as it is brand new. The new car must get at least 22 miles per gallon (18 for regular trucks) and cannot exceed $45,000 in price, and any leases must be at least five years in duration.

Additionally, the new vehicle must exceed the trade-in's gas mileage by a certain number of miles per gallon, which varies depending on whether the trade-in is a car, a regular truck, a heavy work truck, or a van. As a baseline, a new car must get at least five miles per gallon above a trade-in car to be eligible for the $3,500 rebate, and 10 miles per gallon to achieve the $4,500 rebate.

Despite the strict rules, the program has already proven its worth to Tom Sissom, the general sales manager at Colorado River Ford. Before his dealership even ran any ads on CARS, Sissom said he was already getting a dozen calls a day from customers looking to trade up.

"We started getting phone calls immediately, as soon as word got out," Sissom said.

While the program still has several weeks before its official implementation, Sissom said Colorado Ford has already begun taking reservations on new vehicle trade-ins for when CARS gets underway, believing that the program's incentives, combined with Ford's rebates, are simply too good an offer for consumers to pass up.

"We're kind of testing the waters to see if the program would work," he said. "If we can get a warning (of what's going to happen) by doing this ahead of time, we'll be a little more prepared."

But with consumer interest already picking up rapidly, Sissom's biggest fear isn't that the program won't be a success, but that it will prove too successful for Ford and other car companies to keep up with what he believes will be a sudden spike in sales. The dealership already secured its first pre-CARS reservation on July 3, and Sissom was expecting three more reservations to come in Monday afternoon, with the pace only set to accelerate as the 24th draws closer.

"There will be an inventory shortage," he said. "I've never seen such an incentive for someone to buy a car."

Sissom said he also expected the incentive to bring in customers with less-than-perfect credit, since the combined rebates will enable such customers to qualify when they wouldn't have before.

"It's going to give them such a large down payment that they might be able to get a loan when they couldn't at any other time," Sissom said. "You can buy a $20,000 Ford Fusion, and with the right criteria, including the factory rebates, you can get almost half off."

That only refers to the regular, gas-only Fusion, not the Fusion hybrid, which Sissom said has proven so popular dealerships can't keep them in the showrooms. Sissom said he's already resigned himself to fighting a losing battle, expecting demand to far outstrip supply in the coming months, even as Colorado Ford makes every effort to build its inventory ahead of the rush.

"We're increasing our orders by 35 percent across the board, and we're even calling some dealers that are less aggressive with this program and having their cars delivered," he said. "We're going to get as much inventory available as possible. We've been calling dealers everyday, trying to get one, two, eight cars at a time."

Sissom added that the dealership's supply difficulties have been compounded by a new wave of disaffected Chrysler and General Motors loyalists upset at the automakers' acceptance of government bailouts earlier this year. Many of these consumers, he said, are now turning to Ford, while the existing Ford loyalists are clinging harder than ever to their cherished brand.

"The ones that were already die-hard Ford fans are even more so now," Sissom said. "We're normally averaging about 35 new cars a month right now. I'm thinking 50 new a month is where we're going to average at - while supplies last."

That may not be very long at all, however. The CARS program is only currently scheduled to run through Nov. 1 or until $1 billion in rebates have been issued, whichever comes first, barring an unforeseen extension.

"Unfortunately, we're probably going to see this be a short-lived event," Sissom said. "It's sad; but it'll be good while it lasts."

To read further details and frequently asked questions about the Car Allowance Rebate System, or for an updating list of participating dealerships, visit www.cars.gov or call the NHTSA at (866) 227-7891.