At Don Jenkins Carolina Ford and Darryl Burke Chevrolet, management and salesmen have found something to be glad about in recent days.
Customers are showing up daily looking to buy new cars since the federally-funded rebate program—otherwise known as Cash for Clunkers-- went into effect a little more than a week ago.
“We’ve had really good response; we’ve sold five or six cars,” Brian Burnette, controller at Darryl Burke said Monday.
Burnette said each customer who buys a new vehicle is asked to fill out a survey. The first question asks the buyer if he or she would have purchased a car now were it not for the rebate offer. Most, if not all, have said no, he reported.
Bobby Jenkins, owner of Don Jenkins Carolina Ford, has had a similar experience. “It’s been the shot in the arm we needed,” Jenkins said Saturday. “As soon as the rebate announcement was made, people started coming in.” As of Monday, he had sold 12 new cars to people who brought in clunkers.
Jenkins also noted that customers are leaving the car lot with more equity in their new cars than they would have had without the rebate. “They will have more equity when they are ready to trade,” he said.
Jenkins said his company has not received any rebate money from the government yet, but he has been passing along the promised rebate to his customers, confident that he will be reimbursed. “I’d rather be doing this than not selling,” he said. Jenkins said his business dropped off 43 percent since the recession set in the fall of 2007.
As business has picked up, Jenkins said he is finding a number of customers turning to Ford dealerships because the Ford Motor Company did not seek government assistance when hard times hit as General Motors had to.
Under the rebate program, a customer may turn in a car of 1984 vintage or newer. A dealer can look at a web site to determine the average miles per gallon of gas such a vehicle gets and, with other pertinent factors, determine the amount of rebate the owner may expect on a new car purchase. Rebates range from $3,500 to $4,500.
Burnette cited one customer who came in with a 1991 Isuzu Trooper. He estimated its trade-in value at $500. The customer qualified for a $4,500 federal rebate plus other rebates and purchased a new Pontiac 6 for $8,000 less than the sticker price.
When a dealer takes in a clunker, he must drain the oil, then inject a liquid that causes the motor to seize up. He must contract with an approved company to dispose of the disabled vehicle by shredding or crushing it.
The new Cash for Clunkers program is aimed at getting older, gas guzzling cars off the road and also at stimulating the economy.
The first $1 billion Congress approved to fund it was used up in six days, the car dealers understand. It appears Congress will add another $2 billion to the rebate pot. Now dealers are wondering just what will happen when that is gone.
But, for the moment, they are smiling.
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