Cash for Clunkers

THB Photo/Aaron Piper 8/10/09 News Neal Graham, right, stands with Brian Woods, and his son, Alex Woods and daughter, Abby Woods, in front of the their old clunker they traded in for the Woods' new Toyota Tacoma, as part of Ed Martin Toyota's Cash for Clunker event.

ELWOOD — Though the federal Cash for Clunkers initiative seems to have accomplished its goal of getting gas-guzzling vehicles off the road and moving new car inventory, some local dealerships are feeling the stress of dealing with the paperwork-heavy program.

It took salespeople at Kutche Chevrolet-Pontiac-Buick and Chrysler-Jeep-Dodge in Elwood three to four hours to file some ‘clunker’ deals in the computer, owner Jerry Kutche said.

“It’s an extraordinary amount of paperwork,” he said. “You’d get it almost done and it would kick you off.”

Ed Martin Chevrolet-Cadillac and Toyota-Scion General Manager Derek Manis said the federal government was picky when deciding whether to approve the clunker deals submitted by car dealers looking to be reimbursed for the $3,500 to $4,500 offered to customers who traded in their inefficient vehicles for new ones.

“It’s just bittersweet,” he said. “It’s great selling the additional cars, but there is just so much paperwork involved. You’ve got a lot more time invested in each clunker deal than you do a regular car sale.”

Markleville resident Brian Woods took advantage of the Cash for Clunkers program to trade in his 15-year-old Dodge Dakota pickup for a new Toyota Tacoma truck. He said the program inspired him to make the trade; otherwise he planned on repairing the old truck.

“It was needing some repairs and this and that,” Woods said. “The value wasn’t actually worth what the program was willing to offer. It was kind of a no-brainer, really.”

Woods said trading in the vehicle under the program was nearly just as easy as buying a new car without the incentive.

“It didn’t really take that long,” he said. “(The Cash for Clunkers part) took minimal time compared to everything else that goes with buying a new car.”

Anderson’s Ed Martin dealership has seen more clunker deals denied for various reasons than it has been reimbursed for. Manis said sometimes deals were denied by the federal government simply because a customer’s driver’s license copy wasn’t neat enough or their old vehicle registrations were printed off the Internet rather than original copies.

“They’re declining them for reasons that we couldn’t even guess they would decline them for,” Manis said. “We jumped head first into the program thinking we had everything.”

Although most of the issues with denied rebates can be resolved fairly easily, the hoops through which car dealers have to jump to get their rebates add hassle to the program that was designed to help them, Manis said.

Out of Ed Martin’s 71 clunker deals, a few have been reimbursed so far.

“We’re going to do what they asked,” Manis said. “We’ll get our money, it’s just going to be a little more painful.”

Kutche said his dealership hasn’t yet seen a dime of reimbursement from the 15 clunker deals it has done.

“Sure, it’s moved some inventory, but it’s also been a drain on cash,” he said. “I just wait every day for them to approve it.”

Kutche still thinks the program is beneficial for car buyers.

“The program is a good program,” he said. “It’s getting some older cars off the road; it’s increasing the overall fuel economy as far as the cars that are on the road. It’s a good deal for somebody driving around in a clunker.

“(The government) should have made it a 100 percent tax credit.”

As some car dealers nationwide have complained the clunkers program has drained their inventory — especially of small, fuel-efficient vehicles — Manis said Ed Martin had gotten low on some of its most popular vehicles, such as the Toyota Prius, Corolla, Yaris, Camry and Rav-4, but a daily shipment of new cars has kept the dealer from running out completely.

What has been drained at Ed Martin, however, is manpower thanks to the clunkers program.

“Our level of service has declined,” Manis said. “We’re not staffed for the influx of customers that are coming in. Everybody’s working extra hard; it’s just so extremely difficult to keep up.”

Many dealers saw an initial flood of people when the program started, which now has slowed to a trickle in some areas. Manis said on Aug. 1, Ed Martin sold 13 vehicles, nine of which were clunker deals. Saturday, it sold nine vehicles, two of which were clunker trades.

The first $1 billion allocated to the program ran out within about a week. President Barack Obama approved another $2 billion for the program on Friday, sustaining it through Labor Day.

Kutche said if the National Auto Dealers Association had not taken a poll of car dealers six days after the program began, Congress might not have known the initial money was drying up.

Although the flow of clunker traders has slowed, automakers continue to offer factory rebates that, coupled with the clunker rebate, give more incentive for customers to buy new cars.

Kutche said Chrysler and General Motors’ rebates had helped him sell popular Chevrolet Cobalts, Pontiac G5s, Chrysler Sebrings and Dodge Avengers and Calibers.

Manis said Ed Martin had done well locally throughout the economic downturn and he has hopes the dealership won’t suffer after the clunkers program ends.

“I have some initial fears that with all these deals that we are robbing from the future,” he said. “These are all people that were eventually going to trade in these cars.”



Contact Aleasha Sandley: 640-4805, aleasha.sandley@heraldbulletin.com.

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