Cash for Clunkers earns mixed reviews
Auto sales increase, but program’s management is criticized
The Daily Mail
The Register-Star
Sept. 4, 2009

Two weeks after the Car Allowance Rebate System, or CARS, program ended, dealerships in Greene and Columbia counties are reporting positive sales but mixed feelings toward the program’s management.

The CARS program, known familiarly as “Cash for Clunkers,” was meant to promote economic wellness by giving Americans an incentive to turn in their gas-guzzling cars for new, more environmentally friendly models.

Last week, the U.S. Department of Transportation reported that nearly 700,000 “clunkers” were taken off the road and replaced by newer, more fuel-efficient vehicles during the month-long program. The program began in July and ended Aug. 25.

According to the U.S. DOT, dealerships across the nation submitted rebate applications worth $2.877 billion, out of the available $3 billion, with roughly $156 million from dealerships in New York.

“We sold a lot of cars; it was a big boost,” said Peter Backlund, the general manager at Village Dodge, in Hudson, who had to replace more than 40 cars sold off the lot.

“It was much better than I anticipated,” he said.

He said the program was great because it put money back into the hands of the people on the street, “where it belongs.”

“Out of all the programs that the government has been funding,” said Backlund, “I really do not see why they had to debate about spending $3 billion on a program like this,” he said about discussions in the U.S. Congress prior to that body’s June approval of the program.

But not every dealer agreed.

Lenny Romeo, owner of Catskill Buick GMC Pontiac, which serves Greene and Columbia counties, said the way the program had been run was “disgusting” and “ridiculous” and he would not want to participate again.

“The way they ran the program was a total joke,” he said.

Romeo said the program’s false start — it had a brief hiatus in July — and computer system overload had soured him on participating.

Romeo said in August that he had not been paid for the vehicles he sold even those sold early in the program.

The government had promised dealers payments within 10 days.

By this week, Romeo had received payments for only four of the 27 vehicles he had sold through the program. He said a total of $90,000 should come to the dealership.

“If we ran our business that way, we would be out of business,” he said.

But, he admitted, the program did enable people to get financing for new cars, and that more cars moved off his lot than during a regular monthly sales period.

And, he said, about half of the customers who traded their large vehicles, trucks and sport utility vehicles for new Pontiacs and GMC pickup trucks told him they did so only to take advantage of the CARS program.

Phil Thorpe, of Thorpe’s Pontiac GMC, said more than 20 car and truck owners had tried to take advantage of the program at his Tannersville dealership. Only six “clunkers” qualified for the program, he said, characterizing his participation in the program as “limited.”

A car eligible for trade-in had to meet the criteria including being manufactured less than 25 years before trade-in date, have a combined city/highway fuel economy of 18 miles per gallon, had to be insured and registered a year before trade-in and had to be driveable.

Consumers could receive either a $3,500 or $4,500 dealer discount. The price on a new vehicle selected could not exceed $45,000.

Thorpe said last week that he was confident that the government would come through with payments for his vehicles, although he did not say how much he was owed. This week, Thorpe said he had received the entire payment owed him.

Unlike Romeo, Thorpe said he would participate in the program again if it were offered.

Dan Lacy, co-owner of Catskill’s R.C. Lacy Ford Lincoln Mercury Subaru declined to comment about the program until he had been paid by the government, offering only that he had “a lot to say” about it.

Larry Siracusano, owner of Sawyer Chevrolet in Catskill, said the program had gone “OK” and he was low on inventory, but was unavailable for further comment.

Staff at Marchese Ford, in New Lebanon, said the program had seemed to help sales, but could not comment further.

U.S. Transportation Secretary Ray LaHood called the program “wildly successful” because of how it had helped consumers.

“American consumers and workers were the clear winners thanks to the cash for clunkers program,” LaHood said in a press release. “Manufacturing plants have added shifts and recalled workers. Moribund showrooms were brought back to life and consumers bought fuel efficient cars that will save them money and improve the environment.”

According to the U.S. DOT, top trade-ins were the Ford Explorer 4WD, the Ford F150 Pickup 2WD, the 4WD Jeep Grand Cherokee and the 2WD Dodge Caravan/Grand Caravan.

The most popular vehicles purchased included the Toyota Corolla, Honda Civic, Toyota Camry, Ford Focus FWD and the Hyundai Elantra.

Paul Crossman contributed to this report