Dealers mixed on impact of ?Clunkers?


The federal government?s two-month ?Cash for Clunkers? program came to an official end Monday night, leaving Hillsboro car dealerships with contrasting takes on the experience.


One thing all local car dealers in town agreed upon is that ?Cash for Clunkers? generated consumer interest in new cars.

The program, signed into law June 24 by President Obama, was intended to encourage consumers to trade in older, less fuel-efficient cars for new vehicles that get better fuel economy by providing a credit of either $3,500 or $4,500 for qualifying vehicles.

For Danny Flynn, general manager of Midway Motors in Hillsboro, the program accomplished its purpose. His sales team completed 15 to 16 Clunker deals.

?We?ve been happy with it?we can?t complain,? Flynn said. ?It?s done exactly what the intention was, for us.?

Meanwhile, at Hillsboro Ford, co-owner Terry Hagen was less enthused. A combination of limited available inventory, the challenge of submitting vehicle information to the government Web site, and general consumer confusion made it a mixed experience.

?It?s created a lot of frenzy, it?s created a lot of conversation, and it?s created a whole different level of frustration to deal with,? Hagen said. ?But it?s the game in town and you had to play the game.?

Hagen said the dealership made four ?Clunker? deals.

?We took a conservative approach,? he added. ?Inventory is very constrained. I could have done a lot more Cash for Clunkers had I the ability or option to find the inventory for people.?

Once Cash for Clunkers took hold, inventory on the types of cars people wanted became tight.

?That created a little frustration,? Hagen said. ?People would call and say, ?I want an ?09 Fusion.? I told them I?m not going to be able to find an ?09 Fusion.?

When it was announced last week that the program was ending Monday, Hagen said Friday he began referring inquirers to bigger dealerships who might have the desired vehicle in stock.

?Yesterday I had a customer and told them, ?With the program winding down, you better go where you can get one,?? he said.

One thing all local car dealers in town agreed upon is that the program generated consumer interest in new cars.

?It?s affected floor traffic, no doubt about it,? said Doug Wright, owner of Wright?s Inc.

Although Chrysler terminated its relationship with Wright?s store earlier this year, he has access to new vehicles through his connection with the Green Team in Abilene.

Wright said he was involved in three potential Clunker deals. In two of those cases, the trade-in vehicle didn?t qualify for the program.

One common complaint heard from dealers across the country has been the government?s slow response to make good on the promised payments to the dealers.

The two Hillsboro dealerships reflected two common responses of dealerships nationwide: Midway joined with dealers who allowed customers to take ownership of their new vehicle before receiving government payment; Hillsboro Ford decided to hold the vehicles it sold until it at least receives confirmation of acceptance from Washington.

?The reason we didn?t hold vehicles is that the government is going to pay you if you did the paperwork right,? Flynn said. ?We believe we?re going to do the paperwork right, so why should the customer be penalized for our mistake??

Hillsboro Ford?s frustration with the information system contributed to its more conservative approach, Hagen said.

?I have taken deals, and I have the cars they?re trading on,? he said. ?My first Clunker deal was submitted July 28. I still do not have it approved; it?s under review.?

Flynn said Midway received its first government payment last Tuesday on a deal it closed July 24.

Flynn credited the preparation work of staff member Jennifer Unruh for getting the company logged in appropriately so vehicle information was uploaded with relatively few snags.

?I give her a lot of kudos,? Flynn said. ?She took the time and the patience to get us taken care of. So it?s worked out really well. She did a tremendous job, really.?

As for the overall impact of Cash for Clunkers nationwide, local dealers expressed mixed feelings.

?For everything that?s positive, there?s a negative,? Hagen said.

For example, he wonders how removing affordable used vehicles from the market will affect families with limited means, and whether some buyers will be able to sustain the payments on the new cars they acquired in a frenzied market.

Hagen acknowledged that the program ?cleared a lot of idle inventory that sat for a long time,? but it remains to be seen if interest in new-vehicle purchases will continue without the substantive financial incentive.

In principle, Hagen said, he doesn?t favor the government?s recent involvement in the free market through bailouts.

?I feel like government is trying to get control of the private sector,? Hagen said. ?I really don?t know how much of an impact it really has had.?

Wright said he wished the program had included only new vehicles built in this country. Some of the best-selling models under the Cash for Clunkers program were built overseas.

?Since it?s my tax dollars, I would have at least put a U.S. worker back to work that?s collecting unemployment,? Wright said. ?Right now, it?s a double whammy for taxpayers.?

Flynn, meanwhile, expressed some reservations about government involvement in the market, but in the end he said it was good venture for his business, and he would sign up again if given the opportunity.

?Sometimes you question government-sponsored things, but this one worked,? he said.

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