Clunker car-trade plan ends in red tape: Dealers hail boost in sales but decry paperwork hassles, bemoan prospect of customer depletion [Pittsburgh Post-Gazette] 08/25 01:05 PM
Aug. 25--The hugely popular Cash for Clunkers program that took off four weeks ago as a modest $1 billion fund skidded to a stop yesterday as a $3 billion effort that gave a quick boost to the ailing car industry and put more fuel-efficient vehicles on the road.
The final hours found local dealerships ending the program the same way they had started: cheering the extra customers but lamenting the obstacles. Many stopped making deals as early as last week because of delayed rebates, depleted inventories or piles of backed-up paperwork.
Even at the end, the hassles continued. The crush of demand shut down the government's Web site and forced the U.S. Department of Transportation to extend the paperwork submission deadline for dealerships to noon today.
Day Automotive Group in Pittsburgh quit doing clunker deals at its 10 area locations last Thursday morning. It had received only seven rebates of $3,500 or $4,500 out of 200 submitted deals.
"We're waiting for nearly $1 million in rebates," said Day President Debbie Flaherty. "You can't operate on that negative cash flow forever. We're missing a lot of deals we could have done."
Customers traded in lower-mileage vehicles for the government rebate toward more fuel-efficient cars. The program proved so popular that $2 billion in additional funding was approved by Congress after the initial $1 billion was used up in one week. Domestic manufacturers such as Ford Motor (F/PA:$18.1201,$-0.1499,-0.82%) even ordered the production of more models to keep up with demand. The program wasn't limited to domestic brands.
By yesterday morning, nearly 500,000 transactions had been submitted.
Pennsylvania embraced the program, ranking seventh in the country with $100.4 million in requested voucher dollar amounts, according to the Transportation Department.
The government announced last week that dealers had to file the transactions by 8 p.m. yesterday to qualify for the rebate. Burdened by last-minute filings, the online site went down yesterday afternoon.
That left some customers in rebate limbo.
Larry Antonucci of Shadyside Honda was processing a rebate transaction yesterday when the Cars.gov Web site stalled.
"I was writing a request early this morning, and now I'm stuck checking the site every 15 minutes to see if it's up," Mr. Antonucci said.
His success -- his lot can handle 150 cars but now houses fewer than 50 -- mirrors the national trend for Honda (HMC:$32.1025,$0.0725,0.23%) , which makes three of the top 10 most popular vehicles purchased with the rebate.
The latest statistics showed the most popular trade-in vehicles were SUVs, vans and pick-up trucks, while the most popular purchased cars were mostly smaller models. The Toyota Prius, often regarded as one of the most fuel-efficient vehicles available, ranks number six.
Even dealers who stopped dealing to allow themselves more time to file were still rushing to process requests yesterday.
Lee Corsello, the owner of Classic Chevrolet in Bellevue, stopped offering the program Saturday to catch up with paperwork. That meant turning away more than 40 interested customers looking to capitalize on the program's closing days.
Mr. Corsello and his team spent the extra time filling out online forms. At one point, he called the government hot line for help and said he was on hold for more than an hour before hanging up.
He was planning a late night yesterday even after the 16-hour extension was announced.
"It's still not going to be enough time," he said. "Me and my manager are going to be up all night scanning papers if this site's not fixed." He had four filings left to submit.
The sales surge attributed to the program has left some dealers wondering if business will now return to dismal B.C. (before clunker) levels.
"We're worried we've bought future business," said Ms. Flaherty at Day Automotive. "We could come to a screeching halt after this program," she said, adding that car sales typically drop off anyway during the fall and winter months.
Despite her concerns, Ms. Flaherty echoed other dealers and said Day Automotive plans to return its depleted inventories to pre-program levels.
The Three River dealership in Dormont plans to fill its empty spots with 2010 models.
Sales manager Homer Ramsey said the program ended at Three Rivers on Saturday because all 42 cars available for the program had been sold -- "42 deals we probably wouldn't have done" without the government incentive, he said.
Some locations still have full lots, but not necessarily with cars for sale.
"The lot's filled with clunkers," Mr. Corsello said. He's waiting to demolish the trade-ins after the rebates are processed.
"We haven't made 10 cents on this yet," he said.
Erich Schwartzel can be reached at eschwartzel@post-gazette.com or 412-263-1455.
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