While Congress this past week debating the continued funding of the “Cash for Clunkers” program, one local dealership has already reached its verdict on the value of the program.
“It’s been a great thing,” said Mark Scarff, president and general manager of Bowen Scarff Ford Lincoln Mercury. “It’s helping sell cars and trucks.”
According to Scarff, his dealership sold out of their inventory of cars available within the program, a total of about 40 vehicles.
But aside from generating interest among car buyers, Scarff said the customers coming in to take advantage of the program would probably not have come in otherwise.
“This has brought in customers we would not have seen,” he said. “It is new customers.
“The people that have come in have been a different breed,” he noted, adding that most seem to be frugal, have good credit and were simply waiting for the right time to turn in their old cars.
One customer this past week, according to Scarff, turned in a “clunker” and paid $20,000 in cash for a new ride.
“Everything I’ve seen, it’s working as a stimulus,” he said. “And it’s not going to salaries and bonuses.”
The “Cash for Clunkers” program, as it is known, seeks to remove old or large “gas guzzlers” from the road in return for a credit of $3,500 to $4,500, toward buying a new, more efficient model.
The vehicles turned in must get less than 18 miles per gallon and the new car must be rated at at least 24 miles per gallon. Dealers are required to destroy the engine in the clunkers using a sodium silicate solution and they must be crushed within 180 days.
“We’re actually executing the cars,” Scarff said.
Scarff said the real worry among dealers, however, is not the sales, but in reimbursement from the government. Dealerships eat the loss on the car with the expectation that the government will pay them back for the credit given purchasers.
“All of the risk is on the dealer,” Scarff said.
Because of the popularity of the program, consumers ran through congressional funding for it in nearly no time, leaving dealers to worry that the money will be gone before the last of their transactions is reimbursed by the government.
Though the program officially began July 1, Scarff, like many dealers waited until the 136-page rule booklet on the rebate program arrived from the government July 24 before beginning to offer the rebates.
An additional 154-page rule book showed up detailing disposal of the clunkers.
Scarff said the paperwork involved is the “most frustrating” part of the process and said while the dealership is participating, it remains cautious about the approximately $160,000 in reimbursement it is expecting from the government.
He also said that dealing with the government’s Web site about the program, as well as filling out the forms necessary for dealers to get their money back was taking up to an hour each before the government revamped the Web site earlier this week.
According to Scarff, of the 226 cars sold within the program by Seattle area Ford dealers, only 31 of the sales were able to be reported by Tuesday night.
Scarff said the success of the program is encouraging, but because the inventory of available cars went so quickly, he said he’d like to see the program suspended for a little while and then brought back.
“It’s a great idea for spurring the economy,” he said. “I think it worked very well.”
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