North Texas Daily

Car dealers split on Cash for Clunkers

Car dealers split on Cash for Clunkers

August 26
23:30 2009

By Carolyn Brown / Senior Staff Writer –

In an economic climate filled with reports of troubled businesses, one product has been selling like hotcakes: cars.
The popular Car Allowance Rebate System, also known as Cash for Clunkers, ended at 8 p.m. on Monday after a month-long run.
Cash for Clunkers was intended in part to help the environment and to help stimulate the economy by putting more fuel-efficient cars on the road.

William Stalik, Denton McNatt Honda general sales manager, closed the Cash for Clunkers government program on Monday. (Photo by Cristy Angulo / Photographer)

William Stalik, Denton McNatt Honda general sales manager, closed the Cash for Clunkers government program on Monday. (Photo by Cristy Angulo / Photographer)

For consumers, Cash for Clunkers meant a chance to buy a new car with better gas mileage. For auto dealerships, however, the program meant extensive paperwork and some technical difficulties.
“It’s very, very cumbersome,” said William Stalik, general sales manager of Jim McNatt Honda, of the submission process.
Trade-ins had to have a combined city/highway fuel economy of 18 miles per gallon or less, be less than 25 years old and be in drivable condition.
To submit deals to the federal government, dealerships used an online process to scan in necessary documents and reimbursement forms and transmitted them to government employees for review.
The server repeatedly crashed, causing further frustration for dealerships, Stalik said.
“The system would send submissions back with an error saying things like ‘there’s no insurance card’, but we’d look and it was clearly there,” he said.
Although Cash for Clunkers bolstered the new-car market, it hurt the used-car market, Stalik said.
Because the program mandated that trade-ins be destroyed, many usable cars in otherwise good condition were taken out of the used-car market, causing used car prices to rise, he said. This also affected student customers, many of whom are looking for less-expensive used cars, he said.
Although sales ended Monday night, the U.S. Department of Transportation extended the deadlines for reimbursement paperwork multiple times. The staff at McNatt Honda stayed overnight to finish submitting the forms, Stalik said.
Other dealerships had similar stories that mixed increased sales with paperwork problems.
“As far as the business end goes, it’s been good,” Russ Ellis, executive manager of James Wood Autopark said. “It’s the back end that’s a mess.”
James Wood Autopark made 93 deals with Cash for Clunkers, but the federal government has reimbursed only 11 of those, Ellis said.
To keep up with the cash flow problem, the dealership has been using a rebate program from General Motors.
Although the repayments have been slow, Ellis said he feels the program was overall worthwhile.
“Anything that’s going to boost the economy right now is good,” Ellis said. “We’ll put up with the paperwork for the business.”
UNT students had mixed reactions to the program.
Some said they liked the intentions of the program but had suggestions for its improvement.
“I think the intentions of the program were good, but then if you had higher fuel efficiency requirements, it would be better for the environment,” biology senior Brandon Morton said.
Kinesiology junior Jerry Jacob tried to use Cash for Clunkers, but did not meet the fuel efficiency requirement.
“I thought it was a pretty cool program,” he said. “The only fallback that I think it didn’t take into play was the whole 18 miles per gallon and I think that should have been extended to at least 20.”
Ryan Schuette, project manager for UNT’s Office of Sustainability, said the thought that the program had a beneficial impact on the environment.
“The Cash for Clunkers program is a quality program,” Schuette said. “By removing these kinds of vehicles from the road and giving people who do that an incentive, it’s making it possible to make a headway on more environmentally-friendly cars.

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