Local Dealers Feel Effects of Cash for Clunkers ERIN WALTI/SUN
With the federal government spending billions of dollars to stimulate the economy, the effects of one program can be immediately felt around Chamberlain. The Car Allowance Rebate System (CARS), or “Cash for Clunkers,” has been in effect since July 1. Chamberlain/Oacoma dealers felt the effect of the program almost immediately after it began.
“It gives those who normally couldn’t afford a new car an opportunity to purchase one. It’s already started to stimulate the economy,” said Doug Knust, owner of Harry K Chevrolet in Oacoma. The program is designed to decrease the number of older, gas-guzzling vehicles still on the road. Any vehicle less than 25 years old still being driven can qualify if the owner has proof of a clear title, one year’s insurance and registration. The clunker also must get a combined city/highway fuel economy of 18 miles per gallon or less.
Those vehicles which qualify may then be traded in on a new car with improved fuel economy. Depending on how much the fuel economy increases, the trade-in can be worth $3,500 or $4,500. Dealers then take those “clunkers” and disable the engines for salvage before sending them to be crushed or shredded. The dealer can receive a $50 fee for crushing the car; anything over $50 goes back to the customer.
Local dealers are seeing increased traffic because of the program, and are joining thousands of dealers nationwide who are trying to get their rebates through to the federal government.
Harry K’s has done about a dozen deals, as has Willrodt Motors. Paul Willrodt, owner of Willrodt Motors, said he’s beginning to run out of cars.
“I’m working on getting a load of cars from California. We’ve never had to do that before,” said Willrodt. However, receiving the rebates is becoming a challenge for dealers.
“Not all the details are clear at this point. The system is overloaded to get through,” said Jessica Meagher, owner of Don’s Ford/Mercury.
Knust also sees difficulties for the dealers with the deals that have already been made. Once a car is sold, deals are submitted and are reviewed by the government. Until then, either the dealer or the buyers is on hold until the rebate funds come through.
“If we are confident that the deal will go through, we can carry that amount until the government sends the rebate. If we’re not totally sure, we’re just on hold,” said Knust.
Because of the rush of people trying to get in on the program, CARS has gone through its $1 billion fund three months ahead of when the program was estimated to end. While the U.S. House of Representatives has recently passed a $2 billion addition to CARS, the Senate has yet to approve the re-allocation. The money would come from an existing energy bill, and be re-allocated to CARS.
“It’s going to be short-lived if the Senate doesn’t approve it. Germany did this same thing. They have a third of our population and they allocated $7 billion, which seemed to work well,” said Willrodt. Meagher said that people who are interested in CARS should contact their dealers for more information or visit the government’s at www.cars.gov.
“We can help people determine how the program can best fit them,” said Meagher.
