Clunkers cash drawing shoppers, dealers say

Published 12:00 am Tuesday, August 18, 2009

Portrayed as overwhelmingly popular nationally, the federal “cash for clunkers” has triggered more than 100 new car sales in Vicksburg since it began in July.

Problems include a shortage of hot-selling cars and an excess of paperwork, but all dealers agree the program has brought more shoppers to their showrooms, too.

Congress made $3 billion available and is paying dealers $3,500 or $4,500, depending on the model, to get older gas-guzzlers off the road if their owners will buy new higher-mileage vehicles. The cash works as a credit against the purchase price.

Email newsletter signup

Sign up for The Vicksburg Post's free newsletters

Check which newsletters you would like to receive
  • Vicksburg News: Sent daily at 5 am
  • Vicksburg Sports: Sent daily at 10 am
  • Vicksburg Living: Sent on 15th of each month

“The program has been a big boost for our business,” said Vicksburg Toyota’s sales manager Sam Scarber, who said his dealership is selling more Corollas, which get about 35 highway miles per gallon, and the Camry, which gets about 33 highway miles per gallon. “We see at least 10 to 15 people a day who are looking to trade in their old clunkers. It’s created an excitement in the market.”

Scarber said the program has stimulated the auto industry, which had been in a slump that started last fall.

As of Friday afternoon, Scarber said his dealership has almost reached its monthly goal of selling 34 new vehicles and half the August buyers had qualified for discounts by bringing their clunkers to the dealership. Scarber said the dealership has recorded 24 cash-for-clunker sales since the incentive began.

Blackburn Motor Company, which has recorded 23 clunker sales, and the Toyota dealership have joined others in lining up clunkers on their lots. The vehicles must be disabled immediately and cannot be resold.

“The program has been great.,” Blackburn Motor Company general manager Jeb Blackburn said. “It’s put the money back into the customer’s hand.”

Blackburn said his dealerships, which offer Nissans, Chryslers, Jeeps and Dodges on North Frontage Road, are moving “the bulk” of their smaller, midsized sedans.

“We’ve seen a dramatic increase in traffic,” said Blackburn, which he pegged at 50 percent, and an overall 65 percent increase in sales.

Atwood Chevrolet sales manager Craig Schwinn said the dealership has accepted 10 old trucks and SUVs for new vehicles. In one word, he summed up the program as “good.”

However, he said because of the program, his dealership and others are running short on inventory of smaller vehicles. Aware of the inventory shortage situation, the program has been amended to allow shoppers to order cars not in dealer stock and still qualify for the incentive.

A challenge for dealers is to meet stringent requirements on a trade-in vehicle. “A lot of people are finding out their cars don’t qualify under the program,” said Schwinn. He advises consumers to visit the program’s Web site at www.cars.gov to find out if their clunkers qualify. Despite that setback, he said business is “going well.”

On top of those vehicle requirements, dealers are unsure of payment from the government for their clunkers they’ve already accepted.

“It’s a slow process for getting reimbursed,” said George Carr, owner of George Carr Motors on South Frontage Road, which has accepted nine clunker trade-ins under the program.

“The stipulations are rigid. There’s a $15,000 fine for dealers who don’t follow the guidelines,” Carr said. Regardless of the strict requirements, Carr said he’s thankful for any push the car industry receives.

Vicksburg Ford Lincoln Mercury reported accepting 15 clunkers and Vicksburg Honda reported receiving five.

Unless Congress adds more money, the program is expected to end when the $3 billion is allocated.

*

Contact Manivanh Chanprasith at mchan@vicksburgpost.com