Cash-for-clunkers program starts
Photo credit: AP | Newly assembled Prius cars roll of the line in Japan.
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Cash for clunkers guide
Uncle Sam will begin offering cash for your "clunker" starting Friday in an effort to spur depressed new-car sales and get some of the smelliest and fuel-thirsty ones off the road.
Some experts think the program, under which the federal government will pay a trade-in credit of $3,500 or $4,500 toward the purchase or lease of a new, more fuel-efficient vehicle, is too restrictive to have a major impact on sales. (Click here to find out how the program works.)
But some local dealers say there has been considerable interest among consumers and that, with backing from some carmakers before the program started, they have written some deals based on the discounts.
Bruce Nesenger, president of Nesenger 112 Chevrolet in Medford, said his dealership has written about 15 orders based on the clunker reimbursement and that the store advertised as a participant in the program, which is voluntary for dealers. "I think it will help a little," he said of the program.
At Huntington Toyota/Scion in Huntington Station, general manager Lenny Cafarelli says his people have written 18 "clunker" deals.
"We've been bombarded," he said. The dealership won't deliver any cars until approvals for the reimbursements are formalized.
The program's regulations are to be posted formally Friday on the Web site of the National Highway Traffic Safety Administration, which will administer the Car Allowance Rebate System (CARS).
Hyundai, the South Korean automaker, began reimbursing customers early this month in anticipation of the program's official start.
Some skeptics, though, say the program's impact will be limited because it's not likely consumers would seek the federal trade-in allowance for vehicles worth less than the potential federal reimbursement.
Cars worth more are more likely to be sold privately or traded in to dealers for their book value. Those cars can be resold by the dealer as used. Vehicles traded in under the clunkers program must be scrapped.
"If you can get more than $4,500 for your vehicle, you're better off selling it or trading it in without taking advantage of the cash for clunkers rebate," Edmunds.com editor in chief Karl Brauer said in a statement.
The program is scheduled to end Nov. 1 or whenever the $1 billion appropriated for it is exhausted. It is good on new vehicles retailing for up to $45,000.
Cafarelli also said some consumers with a car whose value is on the borderline might be better off trading it in conventionally and putting the amount toward purchase of the new car, in which case there is no sales tax on that amount of money.
Preliminary information about the program has been posted by the federal government at cars.gov. The Greater New York Automobile Dealers Association has posted information online. (Click here to connect.)
"We actually think there's going to be big interest in this program," said association president Mark Schienberg.
At Mullen Motors in Southold, co-owner Dick Mullen Jr. said, "we've had a few people in talking about it," but he worries that because the program will end when funding runs out, dealers might not be notified in time to stop writing deals when the well runs dry.
