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Cash for clunkers clears out some dealerships

Posted August 12, 2009
Updated August 13, 2009

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— The cash for clunkers program has left some dealerships running out of vehicles.

Dmitri Kazanski, general manager of Crossroads Ford in Wake Forest, said since the program started sales have shot up 20 percent.

“It’s a good problem to have on one side because we’ve kind of revived the business,” Kazanski said.

Kazanski said the company didn’t expect so many cars to sell so quickly. It will take time before inventory catches up with the increase in demand.

“The dealer can still possibly get the car that the consumer is looking for. It just may take more time for the dealer to trade for that vehicle,” said Robert Glaser, president of the North Carolina Automobile Dealers Association.

Cash for clunkers program leaves empty car lots

Such a scenario amounts to a complete shift from earlier in the year, when hard-hit dealers saw cars pile up as consumers largely shunned big-ticket purchases.

It also reflects the rampant popularity of the incentive program, which gives car owners vouchers of up to $4,500 to trade in older, gas-guzzling vehicles for new, cleaner varieties.

On Friday, President Barack Obama approved another $2 billion to extend the program until Labor Day, putting consumers back in the car-buying mood. The program's first $1 billion ran out in about a week.

However, industry officials say shoppers now searching for deals may need to be more flexible, given the dwindling number of cars on many lots. Customers hoping for a blue vehicle, for instance, may need to settle for a white one instead, said John McEleney, the chairman of the National Automobile Dealers Association.

"People are having to maybe make a second or third choice," he said.

Kazanski said Crossroads Ford has been working with customers to get the vehicles they want from other dealerships.

The association's chief economist, Paul Taylor, said in a statement Friday that "the overall inventory of passenger cars and light trucks can support another month of robust new vehicle sales" as automakers ramp up production.

Still, even as car lots thin, some wonder whether the new infusion of government cash into the clunkers program is actually weakening consumers' resolve to go out and make a deal.

During the first phase of the program, which began last month, consumers flocked into dealerships, worried that they'd miss out if the money ran out. Now, shoppers may not feel as pressured.

Glaser said he is concerned that the government is not quickly paying back dealers when they deal for a clunker.

Preliminary results of a survey among association dealers show they've been reimbursed on less than 1 percent of transactions.

“Dealers are on the hook for this money,” Glaser said.

A National Highway Traffic Safety Administration spokeswoman Karen Aldana said the agency has begun reimbursing for valid transactions. She said many times dealers don't submit all the necessary information, which can delay the process

Like many other customers, Julianne Rowan took advantage of the program this week. “They’re going fast,” Rowan said.

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  • Alexia.1 Aug 13, 2009

    "Finally, how much would a mushroom or gas cloud over Tel Aviv, Paris, London, New York or LA have cost?"

    The war in Iraq was a complete waste of money. What did Saddam do to America? He's not Bin Laden. He was a bas guy, but he was not our enemy. It was a total and complete waste of our human resources, dollars, and it is the primary reason why Obama is now in a horrible position trying to fix it.

    Obama did not get us into this mess. We were in it when he took office. Did you forget so quickly? He could have done nothing and watched the financial market fall into the toilet, which would have resulted in massive job losses unlike anything we have ever seen. Or, he could try to do something to revive the economy. So far, it looks like the plan is working. But if it fails, what does it matter? Broke is broke, and America would be broke.

  • voiceofreason32 Aug 13, 2009

    Enjoy the new car I helped pay for

  • bradh2 Aug 13, 2009

    Nevermind, this is getting off topic. Enjoy your new cars that I paid for.

  • bradh2 Aug 13, 2009

    "Somehow the 3 billion doesn't seem so bad when compared to the trillion wasted in Iraq. You know, the war that Cheney said would pay for itself."

    And somehow the trillion in Iraq does not seem so bad compared to the $12 trillion debt Obama is making. Do you have the full quote Cheney made or is that your interpretation?

    Finally, how much would a mushroom or gas cloud over Tel Aviv, Paris, London, New York or LA have cost?

  • wildervb Aug 13, 2009

    "Unfortunatly, the $3 Billion spent in the cash for clunkers was borrowed by the Government and our Grandchildren are going to be paying for somebodys car down the road."

    Somehow the 3 billion doesn't seem so bad when compared to the trillion wasted in Iraq. You know, the war that Cheney said would pay for itself.

  • DontLikeTheSocialistObama Aug 13, 2009

    More change "socialism" that we can count on from our Socialist President Obama.

    The cash for clunkers is a case of the government picking losers and winners in our economy. Ironic thing is that very few GM (Government Motors) or Chrysler (Fiat) cars were bought in the Cash for Clunkers program.

    What's next. Cash for Dryers, Cash for Washers, Cash for VCRs etc.....

    Unfortunatly, the $3 Billion spent in the cash for clunkers was borrowed by the Government and our Grandchildren are going to be paying for somebodys car down the road.

  • speedracer_33 Aug 13, 2009

    I traded in a car that I was making decent sized payments on and kept having outrageous car repairs. I look at my increased $100 payments on the new car as a good investment now that I have a warranty and peace of mind that my car will run. I'm maintenance free/problem-free for at least the next 3 years. That's worth it to me.

  • Lyle Aug 13, 2009

    bmg379, the Boyds obviously are entrepreneuial success stories. Have you ever tried to emulate them, or merely envied them?

    Sounds like they deserve everything they worked for. Like Dr. Jim Goodnight, Bill Gates, Ted Turner, et el.

    God Bless America!

  • bmg379 Aug 13, 2009

    Thanks to everyone for making Glen Boyd & Charles Boyd who own the crossroads dealerships Richer,they both have huge properties in Henderson and built the private school their children go to because the old one wasn't nice enough.

  • THE-ESQ Aug 13, 2009

    I just wanted to thank all of you for helping me buy my new car :)

    I paid $4,500 for my explorer 4 years ago and just got the $4,500 incentive.

    What's even funnier?

    I bought it from dodge, which means the bailout money that they already gave them....I got some of that too! (they were matching the CFC with a $4,500 of their own!)

    My family and I have paid taxes for a long time I just see it as a way that we are getting some of that back.

    But thank you all for helping out !! :)

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