'Cash for clunkers' increases Columbia car sales

COLUMBIA — Columbia residents are flocking to area car dealerships to take advantage of the highly popular “cash for clunkers” program, even amid worries that funding for the program is almost depleted.  

Under the CARS program, officially known as Car Allowance Rebate System, the federal government gives car buyers $3,500 to $4,500 toward the purchase of a new, more fuel-efficient vehicle in exchange for their old one. By law, the old vehicles must be sold to salvage yards and scrapped. 

Stuart Head, owner of Head Motor Co. in Columbia, said he has seen a huge increase in sales since the program was announced in July.

“We’ve probably had one of our best Julys ever because of this,” Head said.

Head said he had sold four vehicles through the program before midday on Saturday, and business has been at a steady pace since the program started.

To qualify for the program, buyers must trade in a car that is less than 25 years old and gets 18 miles per gallon or less, and the new car they purchase must get at least 10 miles per gallon more than their old one.  

Bob McCosh, of Bob McCosh Chevrolet, said the program has not only stimulated business but is helping create a safer driving environment for motorists.

“It’s taking older vehicles that aren’t necessarily safe off the road, and putting safer, more fuel-efficient vehicles on the road,” McCosh said. “It’s a good deal on both sides.”

Head said the program has helped drive business in other ways, too. Since the program was instated, dealerships have experienced an increase in traffic, and even customers whose clunkers do not qualify for the rebate have been buying cars anyway, he said.  

“If it wasn’t for ‘cash for clunkers,’ I probably wouldn’t have come to buy a car,” said Jimmy Heiner, whose ‘93 Subaru legacy didn’t qualify for a rebate but who ended up buying a 2006 Chevy Silverado.

Heiner and his wife, Amanda, said they were interested in buying a new American car, but because the gas mileage on their old car was too high to qualify, they had to settle for a used one.  

Due to the popularity of the program, there were concerns that its initial $1 billion allocation was close to running out after only the first week. The Associated Press reported that U.S. Department of Transportation officials were considering suspending the program as early as Friday. In response to these concerns, the House rushed an additional $2 billion dollars to fund the program on Friday, but it has yet to be approved by the Senate.

Head said he wasn’t surprised that the money ran out so fast, as consumers have shown great interest in the program since it was announced.

“I did the math and it comes out to about 13 cars per dealer that can be funded, and we sold that the first day,” he said.

McCosh said his dealership has about 50 "cash for clunkers" deals on the table, some that have been closed and some that have not. He said he has not yet received any money from the federal government honoring those rebates, but said he is confident that the government will hold up its end of the bargain.

Louis Janssen, a Columbia resident, said the news that funding for the program was dwindling spurred him to buy a new car more quickly than he would have, in order to take advantage of the deal before the money ran out. He also said he was not considering buying a new car before the program was announced.  

Although the program has been driving sales throughout Columbia, not all dealers are thrilled with the way it has been administered.  

Chris Ehase, general sales manager for Joe Machens Ford, Lincoln and Mercury, said the “cash for clunkers” Web site, set up by the government, is not reliable and the program has been “a hassle” for him since it started.

“It’s too complicated, takes too much time, and there’s too much paperwork,” Ehase said.

Ehase also said he thinks the program should have been planned better and there should have been more communication between government officials and car dealers.

Despite Ehase’s complaints, he said that this month his dealership has sold about 40 more cars than it normally does.

Tim Popejoy, another “cash for clunkers” consumer and Columbia resident, said his only complaint about the program is that dealers are less likely to bargain with car buyers since there is already a $3,500 to $4,500 rebate.

Mark Kitch, a salesman at Bob McCosh Chevrolet, said that though the program has generated mixed emotions, it has been good for the industry and he hopes it continues.

“There are a lot of people on the fence, and hopefully this will help them get back into buying mode,” he said.