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Clunkers program kicks off as car buyers shop for deals

Janie Jones had outgrown her 1995 GMC van. Or maybe it had outgrown her.

“Everybody’s left home but myself, so it’s sitting there,” Jones said. “I don’t drive it that much because of the gas prices. That was too much gas to burn for just me.”

Friday, the Macon woman was one of the first to strike a deal at Riverside Ford as the federal government kicked off its so-called “cash for clunkers” program. Under the program — officially called the Car Allowance Rebate System, or CARS — buyers who trade in their gas guzzlers can get rebates from the federal government of from $3,500 to $4,500 toward the purchase of new, more fuel-efficient rides.

The idea, federal officials say, is to help the environment while also helping the ailing auto industry.

Jones said she had planned to wait before buying a car, until she heard of the CARS program. Instead, she jumped at the chance to buy a new Ford car, with the feds chipping in $4,500 and Ford another $2,000 in rebates toward the purchase.

“My daddy always told me not to buy what I couldn’t afford,” said Jones, whose sister came along to videotape her purchase. “That was much better than saving up for another year. ... Plus I’m helping to clean up some of this bad air. I fell into a good deal.”

Car dealers were waiting for Friday, when federal officials released the final draft of the program’s regulations. In the meantime, automakers were putting packages together to make deals even sweeter.

Earlier this week, Chrysler announced that it would match whatever federal rebate car buyers might qualify for, meaning an additional $3,500 or $4,500 would be knocked off the purchase price.

Bobby Gregory at Five Star Dodge Chrysler Jeep Hyundai Mazda said the dealership had about two dozen customers waiting for the program to kick in.

“This is definitely a win-win situation for the customer,” Gregory said. “And this is a great way for the government to get those vehicles off the road.”

Gregory said the dealership hopes to sell 50 cars under the program the first week.

“That’s a realistic goal,” he said.

The law allowed auto dealers to start honoring the federal rebates July 1, but they did so “at their own risk,” knowing that the regulations could change, said Ellen Martin, a spokeswoman for the U.S. Department of Transportation.

Butler Toyota had closed 30 deals before the program officially began Friday, said General Manager Leven Holliman.

“We rolled the dice,” Holliman said. “The breadth of the program got wider and not more restrictive. Fortunately, the program got better, not worse.”

As a result, he said, “we’re right on target to beat last July, which was one of our all-time high months.”

The program covers not only new car purchases but also leases. However, it requires that leases be for no less that five years.

Holliman said Toyota has launched lease deals that, with the federal rebates, carry monthly payments as low as under $100 on a Yaris, one of the automaker’s more fuel-efficient models.

DOT spokeswoman Martin said response to the program has been “overwhelming.” Its Web site, www.cars.gov, has had more than 2.4 million hits so far, she said.

“That’s for dealers as well as consumers,” said Martin.

Dealerships are doing their part to promote the program as well, and not just through advertising, Butler is offering to text customers more information. Visitors at www.ford.com can click on a “Recycle My Ride” tab to read more.

Terry Tiller, Riverside Ford’s CEO and general manager, said he believes the federal program will be a great boost for the auto industry.

“It’s going to get people thinking about buying new cars,” he said.

Not all trade-ins will qualify. For instance, passenger cars must get 18 miles per gallon or less to be considered a cash-earning clunker. Rules vary for trucks and SUVs.

“I think we’re going to see a lot of SUVs,” Tiller said.

The law requires that the trade-ins be sold for scrap. The list of authorized scrap yards was just released Friday.

“They will be crushed, shredded or sold for parts,” said Tiller. “They will never be on the road as a car again.”

Dealers could be held accountable if the trade-ins don’t make it to scrap heap.

“There’s massive penalty you would have to pay,” said Holliman.

The government has allocated $1 billion toward the program, which ends when the money runs out or Nov. 1, whichever comes first. Holliman worries that dealers who make late deals might be left holding the bag.

That’s just one of the kinks still to be worked out.

“We just printed out all of the rules that came out today,” Tiller said Friday morning. “It’s 136 pages.”

To contact writer Rodney Manley, call 744-4623.

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