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Consumers rush to cash in clunkers before Monday deadline

Monday, August 24, 2009 | 4:36 p.m. CDT; updated 9:09 p.m. CDT, Monday, August 24, 2009

It was a race to the finish for dealers and customers alike as the government's Cash for Clunkers program headed into its final lap on Monday.

Over the weekend, car dealers across the country watched their lots grow empty as crowds rushed to trade in gas guzzlers after the government said that the $3 billion rebate program would end at 8 p.m. EDT Monday, two weeks earlier than expected.

Adding to the urgency, some dealers said they would stop Cash for Clunkers sales even earlier to make sure the government reimbursed them for the rebates — or because they didn't have enough eligible cars left.

"We thought about it a couple weeks ago," said Annette Palmer, 51, at Town and Country Honda in Berlin, Vt., on Saturday with her husband. They hoped to trade in a 1999 Jeep Grand Cherokee for a Honda CR-V.

"We kind of dragged our feet. Then we heard it was closing and we picked up our feet and ran," she said.

Though short of some new models, such as the Ford Focus, Honda Civic, Toyota Corolla and Nissan Altima, many dealers were still selling as many cars as they could before Monday night's deadline.

Standing outside one of his Hyundai dealerships in Appleton, Wis., John Bergstrom said customers traded in 100 clunkers throughout his fleet of 20 dealerships on Saturday and 100 the day before. They were his two biggest sales days during the clunkers program.

"That's about as good as it gets," Bergstrom said. "It's going out with a bang."

In all, Bergstrom said his dealerships — whose brands include Ford, GM and Toyota — sold 800 cars during the program, boosting sales 30 percent. He had to bring in extra staff to deal with the paperwork, but the sales were worth the hassle, Bergstrom said.

Cash for Clunkers has been wildly successful in spurring new-car sales and getting gas-guzzling models off the road, though some energy experts have said the pollution reduction is too small to be cost-effective. Customers receive rebates of between $3,500 and $4,500, depending on the improvement in fuel efficiency from their old vehicle to their new one. As of early Friday, nearly half a million cars had been sold through the program.

But the new sales left many dealers worried about not being reimbursed by the government. As of Friday, dealers had been reimbursed for just a small fraction of the billions in sales.

In Columbia, 375 clunkers were traded in at Joe Machens’ four dealerships alone.

Gary Drewing, president of Joe Machens, said the program increased sales at his four locations by about 25 percent.

According to Drewing, though, the dealership has only been reimbursed for 25 of the 375 claims that were processed.

“We have no idea when (we will get reimbursed),” Drewing said, but he added, "We process everything in a timely fashion."

Joe Machens ended its Cash for Clunkers program Saturday, Aug. 22. Drewing said they were busy the previous two weeks, but business slowed Saturday as the program was winding down.

For Drewing, the program accomplished what it set out to do: take inefficient vehicles off the road and help consumers buy new cars who might not have been able to before.

But Drewing also said that the program could have been administered better.

“I would have let the customer apply for the voucher and be ready to go when they walk into the dealership," rather than the dealership being responsible for determining whether a vehicle qualified, Drewing said.

Some other dealers also chose to stop participating over the weekend so they could have enough time to process and file the paperwork, including AutoNation Inc., the nation's largest auto dealership chain.

Martin Main Line Honda in the Philadelphia suburb of Ardmore stopped its Cash for Clunkers sales at noon on Saturday. But by late afternoon there were still groups of people wandering the lot.

General sales manager Michael Freeman said the program had been "overwhelming," with 115 clunker sales and big surges in customer traffic at the start and now at the end. He's aiming to get the final stack of paperwork filed before Monday's deadline.

"I have people upstairs, that's all they're doing — paperwork," he said. "The backlog is a nightmare, and it's starting to be a nightmare at the end."

Missourian reporters Catherine O'Neill and Tanya Ortiz contributed to this story.


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