"Cash for Clunkers" Brings Customers; Has Dealers Hopping

As the country entered the second full week for the "Cash for Clunkers" program, it turns out that there's some grumbling setting in from both dealers and consumers.

According to reports from the Associated Press, some dealers are opting out of the program, only to opt back in again. It has them shaking their heads. It also has consumers shaking their heads, too, as the cars the believed qualified, actually didn't because the missed by 1 mpg or more.

That may seem insignificant to you, as a consumer, but to the federal regulators running this program it IS a big deal. Even half-a-mile per gallon will cause you to miss the rebate and consumers don't believe it is fair.

Still, the law is the law or to illustrate with another agency. When the Federal Communications Commission sets rules for a particular radio service as to testing and funding, it expects those standards to be met. For instance if it says that the person must list not only his mailing address, but also his street address - the two could be different - they want both and they will reject an application for that seemingly minor missing info.

The same is true of "Cash for Clunkers." You have to meet the minimum standards and this has some dealers worried. John Rogin, a Buick dealer in Livonia, MI, said he is noticing a change in attitude. Where last week, it was all excitement as the federal program kicked in and people came back into dealerships after months of staying away, this week people, who are finding they don't qualify because they miss by a mile or more per gallon are becoming increasingly bitter and are beginning to say "What about me?" Rogin noted.

Like it or not, that's the way the program will stand, even though consumers believe that dealers should bend the rules a little to help them buy the new cars that qualify. However, with $1 Billion already spent and with the House and Senate rushing another $2 Billion to fund this program, you can believe that regulators will be taking close looks at every deal and there will likely be hundreds of thousands of them.

Indeed, that's what has some dealers upset. Instead of getting their money right away, they have to wait until the car deal is done and all of the paperwork is filled out. The booklet itself is 124-pages long.

Still, other dealers are thrilled with the turnout. Indeed, many of them are running into a problem they haven't seen in a very long time. They are running out of inventory so that people who may want a deep navy blue model may have to settle for a white model or even a third color choice, if the dealership has the model at all. This had dealers like one in East Hartford, CT. worried.

In the last week, they have moved 25 cars in the "Cash for Clunkers" program and he is worried that he won't have any inventory until the 2010s beginning arriving seriously in November.

The funny thing is, some dealers note, is that with the passage of the extra $2 Billion, consumers believe they have an extra window of time in which to buy their cars, especially if the car qualifies. That window may be closer to closing than they think, though, as dealers look out at their shrinking inventory and wonder how they will be able to cover the time from now until the program ends at the end of October.

One Jeep dealer, whose inventory is gone, has decided to close this weekend to fix his parking lot, after all, he has nothing to sell as he waits for carriers to come.
Despite the negative comments by a few dealers, most dealers are enthusiastic supporters of the CARS program. They haven't seen traffic like this in their showrooms in a long time and they are moving vehicles which had been sitting there costing them money (dealers, like consumers, have to buy their cars from the factory and while there may be some factory incentive money available, the bottom line is that each car that sits on a lot for period of time costs the dealer a fortune so they are happy to be moving them).

At Ford, cars that have been particularly hot have been the Focus and the Escape, both of which get very good mileage. Indeed, some Ford dealers hope their inventory will hold out.

It's funny, too, the way some dealers are letting potential customers know about the CARS program. One dealer near Boston sent around what looked like a very official check document that spelled out the factory incentives available along with the "Cash for Clunkers" money. This letter, which also contained prizes, should have more than a few customers heading out.

And, while they still may be heading out in healthy numbers, the AP reported, that the number is slowing just a bit as people believe they have more time and that the cars they want will be there. The sense of urgency that had been there at the start of the program seems to have gone away.

Then again, dealers report, those folks who purchased, cars early were just sitting there on the cash they had saved waiting for a program like this.

It will be interesting what Week 3 brings for this program.