Midstate dealerships deal with lull after Clunkers program

Cash for Clunkers was great while it lasted.

The popular federal program paid car buyers to trade in their gas guzzlers, and the result was almost 700,000 new car sales, according to the U.S. Department of Transportation.

The program was a shot in the arm for the auto industry, but life after clunkers has been a slow go.

“It’s a lot slower because we turned the market upside-down,” said Ronny Smith, sales manager at Five Star Dodge on Riverside Drive. “People who would have bought cars now or in October or November bought them during that six weeks of the program.”

Hughes Honda in Warner Robins sold 37 new cars under the Cash for Clunkers program, said Hughes general manager Chuck Tyler.

“It gave us quite a lift in business,” Tyler said. “It’s slowed down a bit, but I don’t think it’s slowed down to the point it was previously.”

Since the program ended in late August, midstate dealerships say they’ve had to contend with not only slow customer traffic but also low inventory.

“We depleted our new car inventory, so we don’t have a lot of new cars on the ground,” said Kevin Franchi, general sales manager at Youmans Chevrolet.

“We usually have cars in the back getting prepped. We’ve got a full lot, but nothing really in storage. But we’ve still got a good selection.”

Terry Tiller, CEO and general manager at Riverside Ford, said business is starting to pick back up after a significant drop following the clunkers program’s end.

“It’s getting back to where it needs to be,” Tiller said. “We sold 10 cars (Monday). Our biggest problem now is inventory. We depleted just about everything we had. But Ford’s doing a good job getting (vehicles) to us.”

The low traffic and inventory are making it that much tougher for salesmen to close deals in these difficult economic times.

“They’re having to really work at it, but we’ve got some good salesmen,” said Five Star’s Smith. “We’re selling cars every day.”

With no more cash available for clunkers, more customers are eyeing used cars.

“The used car market is great right now,” Smith said, “so that’s what we’re working on.”

That’s not to say that automakers have written off new car business. There are still big rebates and incentives available.

For instance, Ford is offering $5,000 rebates or 0.0 percent financing for 60 months on its F-series trucks. Dodge is offering $6,000 rebates on its new trucks. And General Motors is offering 0.0 percent financing and a 60-day, money-back satisfaction guarantee to buyers.

Hughes’ Tyler said customers also might find credit easier to come by.

“The banks have loosened up quite a bit,” he said.

Cash for Clunkers paid up to $4,500 for qualified trade-ins toward purchases of new vehicles with significantly improved fuel-efficiency. The program has paid almost $3 billion to dealers.

That money, however, was initially slow to come, so many dealers held onto the clunkers before killing their engines and sending them to the scrap yards.

Tyler said Hughes has been paid for 97 percent of its cash-for-clunker deals so far. Youmans’s Franchi said he is still waiting for payment on two or three clunkers.

Despite the lull in business that followed, midstate dealers say the program was a success. Even potential customers who did not qualify were at least thinking about buying a new car.

“Anytime you have that many people go out and buy a car, their neighbors see it, their co-workers see it, their family sees it, and they get the I-want-a-new-one syndrome,” said Tyler. “It definitely improved traffic.”

To contact writer Rodney Manley. 744-4623.