Dealers Hope to Get More Mileage Out of 'Clunkers'
House Approves $2 Billion to Keep Plan Running
Saturday, August 1, 2009
Wearing skin-tight, blue plastic gloves to protect his hands, Brad Brooks poured the liquid poison into the engine of a Ford Bronco, putting the 1992 sport-utility vehicle out of its misery.
It was quickly rendered dead Friday, and in exchange, the SUV's owner received $4,500 toward a new, more fuel-efficient Toyota Tacoma pickup at the Darcars Toyota Silver Spring dealership, courtesy of the U.S. government's "Cash for Clunkers" program. The plan was designed to stimulate auto sales in a sour economy, improving the environment along the way -- the gas-guzzling trade-ins must be scrapped rather than resold and put back on the road to pollute another day.
The program was so popular in its first week that it almost ran out of money. After an evening of confusion Thursday, the House hurriedly convened Friday and provided an additional $2 billion to keep it going. Senate leaders hope to bring the bill up next week. Meanwhile, the clunkers are lining up.
"We poured it into that Dodge and it killed it in eight seconds," said Brooks, pointing to another vehicle as he put down the half-gallon jug of liquid called "Clunker Bomb." The chemical is sodium silicate. In red lettering on the bottle, it reads, "Engine Grenade," and there's a skull and crossbones over the profile of a car.
Brooks, the service director at Darcars Toyota, surveyed the clunker haul, rounded up by the dozens in the corner of a sprawling, fenced lot: rows of old Jeep Grand Cherokees, Mercury Grand Marquises, Chevy Suburbans, a Mercedes station wagon and even a sleek, musty-smelling 1991 Cadillac Brougham with 130,000 miles and worn-out, old-fashioned, chrome push buttons next to the driver's seat.
The Darcars dealership, like thousands of others across the country, has been swamped with customers coming in to trade their old vehicles for new cars since the government began touting the program last month. But the effort has been beset with problems since its formal launch July 24.
Dealers and customers said they were confused about which cars and trucks qualified as clunkers, saying the requirements were not spelled out clearly enough. The program's official Web site buckled under a flood of requests to process transactions, leaving dealerships uncertain about whether the sales qualified. And some car sellers say they are out as much as $1 million because the government has been slow to process reimbursements.
Disaster loomed Thursday evening when it looked as if the program -- which was scheduled to last until Nov. 1 or until its money ran out -- was nearly out of cash. Transportation Secretary Raymond H. LaHood said that the program would be suspended at midnight Friday, drawing a flurry of calls from auto dealers and Michigan politicians seeking to save it. They argued that the program was the best thing to happen to the sputtering auto industry.
"What this deal does is it creates a sense of urgency," said Scott Gruwell, owner of Chevrolet dealerships in Phoenix and San Diego. "It pushes people on the fence to get into a new car. We need to move inventory so we can buy more from the factory." He has sold 45 new vehicles through the program, and spirits are high among salesmen and customers alike, he says.
"One billion dollars for a freeway project takes a while to trickle down," he said. "This is moving iron. It's moving cars. This is quick, fast stimulus."
So far, only 40,000 trade-in applications have been filed, according to a congressional official. But dealers say that paperwork for many clunkers sitting in their lots has not yet been processed by the government. Federal transportation officials told congressional leaders that 200,000 forms still need to be processed, according to results of a survey of dealers involved in the program.
When dealers got e-mail notices from manufacturers telling them "Cash for Clunkers" was endangered, they rushed into action. At Darcars Toyota, general sales manager Ethan Rossignol said that on Thursday night he and his staff called dozens of customers who had been thinking about buying new cars, warning them that the rebates, of $3,500 to $4,500, might disappear at the stroke of midnight.