As buyers pull up, ‘Clunkers’ program goes into overdrive

Clunkers populate the lot outside a dealership in Countryside, Illinois, outside Chicago.
Danny Scott of Lutcher, Louisiana, said he’s thrilled about the new vehicle he purchased through the Cash for Clunkers program, but watch how you talk about his baby, the 1991 Ford F-150 he had to give up.

“I told them [the salespeople] don’t call it a clunker,” Scott said of the maroon and red truck he had for almost 20 years. Yes, it had 422,000 miles on it, but it still ran like a champ, Scott said. “When it was time to get it fixed, I got it fixed. It got me from Point A to Point B. I changed my oil every 3,000 miles or so. I figure it’s an investment, you know” he said. But the lure of a new vehicle — at a basement bargain price — was too much to resist. “I bought a crew-cab Silverado, four-door,” Scott said, noting that he originally only wanted an extended cab. His old gas-guzzling truck qualified for the program’s MPG requirements, and while the Silverado doesn’t sip gas, it still qualified for the fuel efficiency standard. “The truck was listed for $31,000, and they had this employee pricing [customers pay what dealership employees pay]; it came in at $25,000. He gave me $4,000 for my Ford. I paid, like, $21,000. “I figured it was time to make a move.” And what a move, for American car buyers. There was plenty of anecdotal evidence that Americans were indeed moving their clunkers and the program has been so popular that the U.S. Senate was having to work on a $2 billion extension late Monday.

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Despite the popular “clunker” name, the government requires vehicles to be drivable and to have been insured continuously for the past year. So no hauling, pushing or pulling broken-down jalopies into dealer parking lots. But what kinds of vehicles were being turned in “We’re seeing Dodges, Fords, Tahoes, Suburbans, parked for ages,” said Karl Jones, finance director at Team Toyota in Baton Rouge, Louisiana. He said business was brisk as customers who came in with “big, heavy gas-guzzling road hogs” could come out with shiny new wheels for a steal of a deal. Business at the dealership has tripled since the program started about a week ago, Jones said. “We did 20 new cars Saturday, and we sold 15 Friday.” On a good weekend, Jones said, they sell about 18 vehicles. “So, it’s created a frenzy. The market seems to be heading back to where it was.” Still, Jones said, he knew that with the considerable paperwork dealers had to fill out to participate in the program, a boon for consumers could still turn out to be a bust for dealers. “The money’s not real until the government starts sending these checks back,” Jones said. “A lot of folks are coming in who wouldn’t have been in the market, but until the program actually does what it says it’s going to do, we don’t know if it’s a disaster or not.” Mark Near, general sales manager at Bob Smith Toyota & Scion in La Crescenta, California, said his dealership has seen sales double in a week. “It’s phenomenal. We did a 40-car weekend. Normally we do 20,” Near said. As for the kinds of vehicles people were bringing, Near said it ran the gamut. “It’s a potpourri, really.” The dealership may have benefited because of its fuel-efficient cars such as the Prius, the Corolla and the Scion, Near said. “Southern California is amazing; people have more than one car here so it’s not down-on-their-luck people or poor people we’re seeing,” he said. “I’m seeing people who are taking advantage, buying a car for their son. It goes from, ‘Let me see what I can get,’ then [when the selection thins out] desperation mode.” Scott of Louisiana said although government programs often come with a lot of red tape, a person can get a good deal with the clunker program, if they look under the hood. “I think it’s a real good program. It’s not a fluke,” he said.