Page 3 of 3   <      

House Passes Bill to Prolong 'Cash for Clunkers'

Shortly before 1 a.m. Friday, several local dealers said in interviews that they would wait to see how the government was going to proceed with the program before they accepted any more clunkers. Dealers had been expecting an overwhelming response to the program to continue through the weekend.

"Clearly, this has been a very stimulative program that's got consumers back into the car market. It's our hope that possibly more funds can be made available," said Cody Lusk, president of the American International Automobile Dealers Association.

Lusk said the group has fielded hundreds of calls from frustrated dealers who have had problems entering vehicle data into the program's Web site. He said frequent crashes of the site have made it harder for car sellers to complete deals.

Jack Fitzgerald, who owns several dealerships in the Washington region, said his stores have already taken in about 200 clunkers. He said the government hyped the program too much before setting clear rules and guidelines on it. He suggested that the government consider lowering the dollar amount of the vouchers and extending the program for more time.

Tammy Darvish, another major auto dealer in the Washington area, said that her more than two dozen dealerships have had lots of interest in the program but that its success has left dealers strapped for money as they wait for payments from the government.

Under the program, dealers credit the amount of the voucher to customers who buy new cars. They then get reimbursed by the government.

"There's a whole lot of money out there that dealers haven't collected on," said Darvish, who noted that she's taken in about 200 clunkers. "We've sold the cars and we've processed the paperwork, but we haven't been reimbursed. I'm out about $1 million. The government is supposed to reimburse me for that."

At a Toyota dealership in Silver Spring Bob Grimm, a 64-year-old retired Defense Department worker, came last week to look at buying his son a new car. He didn't buy then but went home and researched the prices on the Internet. He came back Friday and made the deal. He traded in his clunker -- a 1996 Chrysler minivan with 176,000 miles on it. With the $4,500 voucher he got from the clunker program, plus getting rebates and other incentives -- he ended up buying a 2010 Toyota Corolla for $11,370. The car's manufactured suggested retail price was $18,505.

"That's why I couldn't resist the deal," said Grimm, who drives a 2006 Corvette. "It was $4,500 off the $15,870 price."

The Toyota Silver Spring dealership manager Ethan Rossignol said Toyota estimated his dealership would sell 200 cars in July. They've sold 350 -- 110 of them were consumers buying new cars after trading in their clunkers. His back lot, now dubbed "The Clunker Lot" is full of gas guzzlers from the 1990s. There is a Mercedes station wagon, a 1991 Cadillac Brougham with 130,000 miles on it, Chevy Suburbans, Jeep Grand Cherokees, Ford Explorers and Mercury Grand Marquis.

"It's nuts," Rossignol said of how busy his dealership has been. "It is one of the best things to happen to the automobile industry in a decade."

Staff writers Sholnn Freeman, Paul Kane, Tom Heath and Scott Wilson contributed to this report.


<          3


© 2009 The Washington Post Company