‘CLUNKERS’ catches on

Dealers have seen boost from rebate program

By Justin Schuver (Contact) | Andalusia Star-News

Published Thursday, August 13, 2009

Local automobile retailers say they have seen a large amount of interest in the government’s “cash for clunkers” program, which provides tax credits to customers who trade older vehicles for new vehicles with better fuel economy.

“There’s definitely been a lot of interest in the program,” said Joey Langley of Massey Automotive. “Early on there was some confusion about it, but now that people understand how the program works we’ve seen a lot of response.”

“Cash for clunkers,” officially known as the Car Allowance Rebate System, initially was financed by $1 billion in federal stimulus money, but the program proved so popular that Congress approved another $2 billion in funding Fri., Aug. 7.

To qualify for the program, customers must have owned and insured their old car for at least a year, and the vehicle cannot be any more than 25 years old. When they trade that car for a new vehicle that receives better gas mileage, they will receive a tax credit on their 2009 return to offset the purchase of the new car. New vehicles with higher fuel economy can net a customer a $4,500 tax credit, while vehicles with less fuel economy net $3,500 — a tax credit is a reduction in the amount of taxes an individual owes.

“We’ve definitely seen an increase in foot traffic because of this program,” said Richard Owen of Andalusia Ford. “We’ve had several who have already traded in for a new vehicle — I can’t recall the exact number. We had one customer who traded in a 1992 Lincoln Towncar toward a new Ford Focus.”

While some customers may believe that only hybrid vehicles or small compact cars qualify, that is not the case. The minimum gas mileage for a qualifying car is 22 mpg, the minimum for some small trucks and SUVs is 18 mpg and the minimum for a large truck is 15 mpg. Used cars do not qualify for the program.

“I’d say just about all of the cars that we carry would qualify under cash for clunkers,” Langley said. “All of our (Chevrolet) Impalas, (Chevrolet) Malibus, and most of the Nissan cars qualify. Even some of the Dodge and Chevrolet trucks qualify.”

Owen said many customers have traded in old trucks for the new Ford F-150. He said the Ford Focus and Fusion are also popular buys, news that would no doubt excite the federal government. One goal of the cash for clunkers program was to boost the sales of American-made vehicles.

The Associated Press reported that Ford’s sales rose 2.4 percent in July from the same month last year, its first year-over-year increase since November 2007.

The program’s original cut-off date was Nov. 1, but the government may have underestimated the public’s interest. Cash for clunkers’ initial $1 billion in funding was nearly exhausted just one week after the program began on July 24.

“It’s going to be here until the money runs out, which we’ve heard could be as early as Labor Day,” Owen said.