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Clunkers Program Claimed Collectibles

Federal program attracted some rare and exotic trade-ins.

by on Sep.24, 2009

Would you pay $4,500 for a 1997 Bentley Continental R.  That's all one owner got for the luxury sedan, originally priced around $300,000, as a Cash-for-Clunkers trade-in.

Would you pay $4,500 for a 1997 Bentley Continental R. That's all one owner got for the luxury sedan, originally priced around $300,000, as a Cash-for-Clunkers trade-in.

My friend Ralph had to spend a Saturday afternoon in his garage getting his old beater running again before he could trade it in under the recently-concluded Cash-for-Clunkers program.

And he wasn’t alone.  The federal program, formally known as the Cash Allowance Rebate System, was designed to get older, gas-guzzling, pollution-spewing clunkers off the road by offering owners $3,500 or $4,500 vouchers, depending on the mileage they were trading in on.  And, by and large, that was a pretty good deal for most of the roughly 800,000 vehicles the government got off the road.

Trade In Your Old News Source!

Trade In Your Old News Source!

But government records suggest that at least of the few of the trade-ins might have drawn a fair bit more if their owners had really looked for the best possible deal.  And some of the so-called “clunkers” were pretty exotic and potentially desirable collector cars.

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Now What? Industry Needs to Keep Clunkers Momentum Going

Dealers frantic to get claims in before CARS wraps up.

by on Aug.25, 2009

It's all over but the payback.  While dealers wait for their money from the government, industry analysts try to figure what impact the CARS program will have on sales during the months to come.

It's all over but the payback. While dealers wait for their money from the government, industry analysts try to figure what impact the CARS program will have on sales during the months to come.

By noon today, U.S. auto retailers will have to submit the final paperwork for their last Cash-for-Clunkers deals or forfeit the refunds they expect from the federal government.

The Cash Allowance Rebate System, or CARS, as it’s more formally known, has come to a close, barely one month and $3 billion after it began. As of midday Monday, dealers had already submitted claims covering 625,000 vehicles, which would generate at least $2.6 billion in voucher payments for dealers.

Your Inside Source!

Your Inside Source!

A sizable number of claims have yet to be submitted, however, and dealers were working frantically into the night trying to get the last paperwork completed, despite the decision to extend the deadline until midday Wednesday. In fact, that extension was largely due to the repeated crashes of the government’s own computer system, on Monday.

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Call an End to Clunkers, Dealers Demand

With $3 billion already gone, stop says trade group; DOT Secretary LaHood promises "They'll get their money."

by on Aug.19, 2009

The Cash-for-Clunkers program may have been too successful for its own good, and now dealers want it halted immediately.

The Cash-for-Clunkers program may have been too successful for its own good, and now dealers want it halted immediately.

That didn’t last long.

Despite an infusion of an additional $2 billion in federal funds, on top of the original $1 billion approved by Congress, it appears the unexpectedly popular Cash-for-Clunkers program has again run out of money, says an auto dealer trade group.  As a result, the National Automobile Dealers Association is asking that Washington halt the program immediately.

NADA fears that dealers could wind up being stuck for Clunkers cash they’ve fronted for the program if it turns out more than the total $3 billion has been spent.  Officials from the Department of Transportation have acknowledged they are hugely behind in processing applications for reimbursement by dealers and have so far paid out only around $100 million, leaving many auto retailers strapped for cash.

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Cash for Clunkers Working – But at a Price

Carbon dioxide emissions are down as buyers dump guzzlers.

by on Aug.19, 2009

There are plenty of scammers and a few unscrupulous dealers hoping to take advantage of the Cash-for-Clunkers program - at your expense.

As to the longer-term impact, the big question is whether Clunkers will steal future sales. There is a definite pull-ahead of sales, according to CNW data.

The Cash-for-Clunkers program has proven an unexpected success, surprising critics and proponents alike.  But the program has had some unexpected results, so far, while also achieving some of its original goals, says a new survey by CNW Marketing.

It took barely a week for the program, officially known as the Car Allowance Rebate System, or CARS, to burn through the initially-allocated $1 billion, and a second tranche, worth $2 billion in federal funds, is expected to be gone well before the program was originally expected to expire, in November.

That should pull about 750,000 old clunkers off the road.  And, in turn, “It would appear greenhouse gas emissions were cut by more than 90%,” since motorists switched to more fuel-efficient vehicles, said Art Spinella, chief analyst with Oregon-based CNW.

No Trade-in Needed!

No Trade-in Needed!

But that’s assuming the new vehicles would be driven the same amount as the clunkers they replaced, added Spinella, but his survey of C4C buyers shows that, “these new cars and trucks will likely be driven significantly more miles than the clunker, according to owners, and could use nearly 14.6 million gallons of gasoline more than the vehicles they replaced.”

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Clunkers Reportedly Drove Strong July Sales

But dealers on hold waiting for Senate to OK more cash.

by on Aug.03, 2009

Ford expects to report a jump in July sales, its first since November 2007, in part due to demand for vehicles like the 2010 Ford Fusion Hybrid, shown during its unveiling, at the L.A. Auto Show

Ford expects to report a jump in July sales, its first since November 2007, in part due to demand for vehicles like the 2010 Ford Fusion Hybrid, shown during its unveiling, at the L.A. Auto Show

With several automakers, including Ford and Subaru signaling they will report strong sales gains for July, industry analysts are largely declaring the Cash-for-Clunkers program a success, at least for the short-term.  But dealers around the country are approaching the panic level as they wait to see if the U.S. Senate will approve a $2 billion cash infusion to keep the program going.

Originally expected to post a modest 4% year-over-year sales decline, Ford’s chief analyst George Pipas hinted that July sales will, in fact, bring the automaker its first monthly increase since November 2007.  Subaru also signaled it would see a July sales increase, though like Ford, it won’t release formal figures until later in the day.

Don't Wait for Frankfurt!

Don't Wait for Frankfurt!

The website, Edmunds.com, is projecting an overall 16% decline for the month, compared with July 2008 – compared with a year-to-date plunge of 35% — but Edmunds also predicted a decline for Ford, so its forecast could prove conservative.  And, even so, the dealer referral site is projecting that the industry’s July 2009 figures will be up 11% compared to June of this year.

Whatever the actual figures for July, most analysts are crediting the so-called Cash-for-Clunkers program for the industry’s newfound momentum.  The measure, formally known as the Cash Allowance Rebate System, provides up to $4500 in vouchers to those trading in an old, low-mileage vehicle for a new, more fuel-efficient model.

Congress set aside $1 billion to fund the program, but by last Friday, barely a week after it had officially gone into effect, there were indications the pot had already run dry, leaving dealers across the country trying to figure out how to proceed as potential customers flooded their showrooms.

On Friday, with the backing of the White House, the U.S. House of Representatives approved another $2 billion for Clunkers – still leaving the combined total $1 billion short of the $4 billion sponsors originally asked for.  But the new funds would triple, to around 750,000, the number of vehicles CARS could handle.

It’s unclear if and when the Senate would act on the funding request, but it could happen this week.  While House has already packed up for the annual August recess, the Senate remains in session to handle the planned vote on Supreme Court nominee Sonia Sotomayor. But there is less support on that side of Capitol Hill, so the outcome remains uncertain.

Hoping to ensure they don’t lose potential sales, many U.S. dealers are proceeding as if the extension of the CARS bill will happen.  But some have also begun requiring customers to sign waivers that would force them to return the $4,500 should the Senate vote down the additional $2 billion request.

House Approves Another $2 Billion in Clunkers Cash

Buyers drain initial $1 billion in less than a week.

by on Jul.31, 2009

As many as a quarter million Clunkers could be crushed under the CARS program - even more if the Senate signs on to a $2 billion expansion of the Cash-for-Clunkers program.

As many as a quarter million Clunkers could be crushed under the CARS program - even more if the Senate signs on to a $2 billion expansion of the Cash-for-Clunkers program.

If there’s a chance it’s broke, fix it.  That seems to be the preemptive mantra of federal lawmakers, responding to word that the Cash-for-Clunkers program is ready to run out of gas, or, more accurately, cash.

The program, conceived as a way to kick-start the sluggish American automotive market, was passed by Congress, in June, though it only formally went into operation a week ago.  Officially known as CARS, for Cash Allowance Rebate System, it provided vouchers worth up to $4,500 for those trading in old vehicles for newer, more fuel-efficient models.

Originally intended to run through November, and to help promote the sale of around 250,000 high-mileage models, there are preliminary indications the Clunkers program is far exceeding even the most optimistic expectations.  Already, the CARS fund has issued vouchers to about 96,000 motorists, but with overloaded dealers struggling to fill in the paperwork, observers now believe that the $1 billion set aside by Congress may already have been exceeded.

High-mileage insight!

High-mileage insight!

“My showroom is packed,” said dealer Earl Stewart, of Earl Stewart Toyota, in Riviera Beach, Florida.  He added he is “really concerned” that he may not be able to complete sales with 61 new customers if, in fact, CARS has run out of cash.

Dealer Stewart isn’t the only one worrying.  In a Friday afternoon meeting with reporters, Pres. Barack Obama noted that the Clunkers program has “succeeded well beyond our expectations and all expectations,” but warned that there “legitimate concerns funding in this program may soon go out.”

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Will Cash-for-Clunkers Bring Auto Salvation?

CNW forecasts big bump in sales.

by on May.25, 2009

After a lengthy debate, it's looking likely that a Cash-for-Clunkers bill will be passed by Congress this Summer.  And a new study says it could yield significant new sales for struggling automakers.

After a lengthy debate, it's looking likely that a Cash-for-Clunkers bill will be passed by Congress this Summer. And a new study says it could yield significant new sales for struggling automakers.

One of the first bits of business awaiting Washington lawmakers, after their week-long Memorial Day break, is the cash-for-clunkers debate.  Hoping to kick-start the U.S. market, several proposed measures would offer big cash incentives to trade in older vehicles for newer, more fuel-efficient ones.

Whether such a bill will pass – and in what form – remains to be seen.  But with imilar laws generating big returns in markets like Germany and the U.K., there’s growing support that could translate into votes.

Unfortunately the U.S. versions, unlike the U.K., require no contribution from  the automakers who would benefit the most from it.

Will a cash-for-clunkers bill work here?  A new study from the Oregon-based research firm, CNW Marketing, suggests it could prove extremely effective, depending on how inclusive a final measure is defined.

“If the federal government can enact a cash-for-clunker program quickly,” writes CNW President Art Spinella, “if could mean at least a quarter million additional car sales in ’09, and as many as 1.2 million if the effort catches the fancy of all those who are even somewhat interested in ridding themselves of an older vehicle.” (more…)