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Car dealers brace for clunker trade-in rush

Posted August 21, 2009

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— Area automobile dealers expect a rush of business this weekend after the government announced it would put the brakes on the popular "Cash for Clunkers" program on Monday.

The program, which gave $4,500 cash rebates for people swapping old gas-guzzling vehicles for new fuel-efficient ones, has exhausted the $3 billion Congress approved for it in just over a month.

Cash for Clunkers Dealers await payments for taking clunkers

All new deals will have to be completed and dealers must file their paperwork by an 8 p.m. Monday deadline for the dealers to get repaid for the big incentives.

"The program has been very smooth. We would love to see some things speeded up a little bit, but I think they're doing a real good job for what they've got to deal with," said Tom Costello, general manager of Rick Hendrick Toyota in Fayetteville.

Dealers nationwide have complained that the government has been slow to reimburse them for the rebates. Each deal has about a dozen forms that must be completed, which slows processing.

"Sales have been booming, but we've only been paid for one out of 100," said Garry Winebarger, general manager of Bryan Honda in Fayetteville. "It's stressful because you don't know if it is going to get approval and paid, or is it going to get rejected and not get paid?"

The government has more than 1,000 people processing applications, up from 200 when the program started, and Costello said he's confident all of the reimbursements will be paid soon.

"Uncle Sam is going to pay us. We're not worried about that," he said.

Costello said the process could go faster if clunker applicants had all forms complete and accurate before going to a dealership.

"Only 25 percent are coming in with exactly what you need," he said. "That other 75 or 85 percent (has) to go home and get more (paperwork), so that's tough."

Rick Hendrick Toyota has sold about 80 cars under the Cash for Clunkers program, and Costello said he expects to do another 20 deals this weekend.

The dealership lot is littered with SUVs, a 10-year-old Volvo sedan and a red Chevrolet Camaro waiting to go to the scrap heap.

“We’re making them so they can’t run anymore. We take them, and we crush them and that’s it. They’ll never be seen on the road again,” salesman Leon Constantino said.

Kraibue Kumwachirapitak brought in a 1991 Mercedes Benz sedan that his aunt bought new in Germany. The car got 14 miles per gallon, and he said he's not sentimental about swapping it for a new Toyota Corolla.

"I'm not going to miss it," Kumwachirapitak said.

Julia Koon traded in her Hyundai Sonata for a Corolla as well. The Sonata was missing the handle on the inside of the driver's door, had a hole in the rear bumper and got only 18 miles per gallon.

"I need a reliable car," Koon said.

Costello said his dealership plans to stop taking applications Saturday night, but he won't turn anyone away Sunday or Monday. People waiting until the last minute to trade in their clunkers need to have all of their paperwork in order, he said.


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  • hardtack Aug 21, 2009

    2nd best deal I ever got!

  • Bill Brasky Aug 21, 2009

    What spin. Lets just ignore how a measly 3 billion just caused our economy to jump start. No, lets focus on how we are selling cars to people who can't afford them. Guess what Deathrow, these people were approved for a car loan, meaning they can afford them, and yes there are millions of Americans who would benefit with a new car. Not sure what you got against the car industry.

    You guys didn't seem to care when we shelled out trillions to the Iraqis. Now we are spending money in America and its a huge waste? Think Deathrow, please.

  • DeathRow-IFeelYourPain-NOT Aug 21, 2009

    This program barely makes a dent in the emissions and oil dependency of the US. But it is hurting American Citizens in a tremendous way. Most of these "clunkers" are paid off. So now a person goes from No car payment, to a car payment they probably can barely afford. This program's biggest effect is to put Americans further into debt.

  • time4real Aug 21, 2009

    everyone works this weekend. 16 hours both days. Come mid-week, you're all back at home watching Opra!