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The Honolulu Advertiser
Posted on: Wednesday, August 5, 2009

'Cash for clunkers' in rush hour


Advertiser Staff and News Services

Hawaii news photo - The Honolulu Advertiser

Some of the "clunkers" already traded in under the government program yesterday awaited junking at the Aadlen Bros. Auto Wrecking lot in Sun Valley, Calif.

DAMIAN DOVARGANES | Associated Press

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Hawaii news photo - The Honolulu Advertiser
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As dealerships and car shoppers alike wait for the Senate to decide the fate of "cash for clunkers," one question reigns: Deal or no deal?

Many dealerships have stopped selling cars and trucks through the program while Washington decides whether to approve more money for it. In some cases, salesmen are only taking deposits and not letting customers drive new vehicles off the lot.

Other dealers say the confusion is great for business, enticing customers afraid to miss out on a bargain.

"We're selling cars like candy bars," said Bobby Soldano, general sales manager for Arrigo Dodge Chrysler Jeep Sawgrass in the Fort Lauderdale suburb of Tamarac, Fla., who was flooded with phone calls and messages yesterday from customers worried they were too late.

"I hope they keep it going," he said. "The only problem is, we need to get more inventory."

Senate Majority Leader Harry Reid signaled yesterday that the Senate will vote before Friday to extend the program, which pays consumers up to $4,500 to trade in their old cars and trucks for new ones that get better gas mileage. The House has already approved the extra money.

The White House has warned that the program could end Friday if the Senate does not add $2 billion to the program. The original $1 billion is quickly running out because so many people have rushed to take advantage of the rebates.

Maui Toyota general manager Damien J.K. Farias said his dealership is continuing to take trade-ins under the federal program.

"We're working like we normally would," said Farias, whose dealership had sold four vehicles under the program as of yesterday afternoon.

Dealers in Hawai'i have sold $698,000 worth of vehicles that qualify under the program, according to data compiled by the Detroit Free Press. That's the second lowest amount of any state, after Wyoming's $302,500 in sales, the newspaper reported.

Dave Rolf, executive director of the Hawaii Automobile Dealers Association, said it doesn't appear that any of the local car dealers have received their reimbursements yet.

"The dealers have to go through the labyrinth of documentation in the process and there has been some frustration that the (Web) site goes down frequently."

Nonetheless, all indications are that the program is providing a much-needed boost to Hawai'i's auto dealers. One dealer reported his strongest July in two years and all dealers are reporting increased traffic in the showroom, Rolf said.

Meanwhile, some Mainland car dealers are in something of a holding pattern. Some are refusing to finalize sales.

"We'll take the deposit, we'll hold the car and if the Senate passes the money and we're told we're good to go forward, we'll call them back and continue through the process," said Bill Colgate, president of Brown's Volkswagen in Richmond, Va. "There's just no way for us to do it otherwise."

John McEleney, chairman of the National Automobile Dealers Association, said Monday was the last day his two dealerships in Iowa completed a "cash for clunkers" transaction. He accepted deposits from 10 customers who want to trade in.

McEleney said his organization was encouraging dealers to be "cautious," warning them there were no guarantees they'll be reimbursed for sales they make this week.

At Mainland dealerships still honoring the program, business is brisk.

Bill and Jessica Dietrich were shopping around Baltimore-area showrooms for something to replace their 1990 Ford E150 van. Bill said he felt a sense of urgency to make a purchase because of the program's uncertain future.

"They want to give me $4,500? I'll take it," Dietrich said. "That's why we're hurrying up." But he was frustrated with the selection: "Everybody's out of everything."

Soldano said he sold 54 vehicles to buyers taking advantage of the program just last weekend, after the future of "cash for clunkers" became uncertain. The government estimates that 250,000 vehicles will be traded in under the original $1 billion.

"The confusion is probably helping sales," said Mike Meagher, general sales manager at Lexus of Towson in Maryland. "It's spurring people to do it now."