Gerald Anthony Guidry
July 28, 2009
Florett "Flo" Johnson
July 30, 2009
Gentlemen, start your trade-ins.
The federal government’s attempt to spark retail sales and increase automobile gas mileage created the Car Allowance Rebate System, or “Cash for Clunkers” program, which began Friday. However, some dealers said they would not start the program until Saturday or Monday.
Customers can take their old car to a dealer, trade it in for a more fuel-efficient vehicle and receive a price reduction of up to $4,500 on the new purchase, depending on the amount of fuel economy that is gained.
The purchase must be for a new, non-used car. Dealers will be reimbursed by the federal government.
The program produced five sales on the first day at Barker Honda in Houma, said new car sales manager Jason Fonseca, all at the $4,500 price reduction. Those deals were started a few days before the program opened on Friday, Fonseca said.
Jessie Thompson, sales manager at Southland Dodge in Houma, said he had sold one vehicle under the new program Friday, though he has had several people looking into the program.
Chrysler said last week the automaker is matching the amount of the purchase price discounted through the program on most of its 2009 models, or the company will offer zero percent financing for six years. That incentive will last through Aug. 31.
Tri-parish car dealers held differing opinions about the effect “Cash for Clunkers” will have on sales, which have been impacted by lower car sales nationally.
The program will last through Nov. 1 or as long as the $1 billion in funding holds out. Congress could extend the program.
A spokesman said Courtesy Toyota in Morgan City has a couple of customers looking into buying cars under the program, which started Monday at the dealership, but he does not believe the rebate system will make much of a difference.
“It will have an effect but will not put us back to normal, maybe one or two a month,” he said. “The program has so many stipulations.”
He said cars probably would not even qualify. Trade-in vehicles cannot be more than 25 years old and, when new, needed to have a fuel economy of 18 gallons per mile or fewer. The car must be in running condition and have been registered and insured to the customer for at least a year.
“Some old trucks will qualify that they are still driving,” he said.
Terry Stevenson, new car sales dealer at Trapp Cadillac Chevrolet in Houma, also said the program’s guidelines are too numerous.
“I’m not sure of all the rules,” he said.
But Stevenson was more optimistic, even though he had not concluded any deals yet.
“It will affect sales. There are a lot of people with clunkers out there,” he said. “It absolutely will affect us.”
In the program, customers receive a $3,500 discount on the purchase if the new car’s gas mileage is between four to 10 miles per gallon greater than the trade-in. A gas mileage gain greater than 10 miles per gallon results in a $4,500 discount.
To obtain a $3,500 discount on light trucks and SUVs, the new vehicle needs to get between two to five miles per gallon more than the trade-in.
To qualify for a $4,500 discount, the new truck or SUV must have mileage five miles per gallon better than the old vehicle.
For large trucks and SUVs, new ones must top the trade-in by one mile per gallon to receive the $3,500 reduction and two miles per gallon to qualify for the $4,500 discount.
The cost of the new vehicle that is purchased cannot exceed $45,000. The new vehicles must have a 22 miles per gallon fuel economy for cars, 18 for small trucks and SUVs and 15 for large trucks and SUVs.
President Barack Obama signed the CARS legislation into law in late June.
– The Associated Press contributed to this article.
The ailing auto industry is pulling out all the stops for President Barack Obama’s Car Allowance Rebate System, better known as the “Cash for Clunkers” program, which began Friday. Many local dealers spent the weekend readying their lots with signs hoping to attract customers. * Photo by KEYON K. JEFF
