BRADENTON — Car dealerships in Manatee County like what they’re hearing about government’s new incentive for car shoppers.
President Barack Obama on Wednesday approved “cash for clunkers” legislation that will give $3,500 to $4,500 to consumers trading in old gas guzzlers for fuel-efficient vehicles.
For local auto dealers, the program couldn’t have come at a better time as car sales have taken a substantial hit in this economy.
“All it could do is help,” said Jeff Conley, owner of Conley Buick on Cortez Road.
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Cash for clunkers will make $1 billion available one month after the legislation is signed into law. The program will last until the money runs out or through November, with a chance for renewal then.
The vouchers, available in amounts of $3,500 or $4,500, are expected to go to 250,000 consumers.
Car owners are eligible if they have a vehicle that gets 18 miles a gallon or less in combined city and highway travel. Consumers get a $3,500 voucher if they buy a car that is more fuel-efficient by four miles, and a $4,500 voucher is awarded to those buying a vehicle more fuel-efficient by 10 miles.
“Obviously it’s going to allow people who maybe couldn’t buy a car, now buy a car,” said Bob Firkins, owner of Chrysler Firkins in Bradenton. “We have cars priced $11,000 to $12,000, you put a $3,500 to $4,500 deduction to that — all of a sudden, instead of a $300 a month payment, you might have a $200 or $150 payment a month.”
Researchers at the University of Michigan estimate that the federal fuel efficiency mandates will result in billions more in profit for U.S. automakers.
Eric Kelly, used car manager at Cox Mazda on Cortez Road, estimates the cash for clunkers program has potential to increase sales at his dealership by 25 percent.
“We’ll take anything that can help right now,” Kelly said. “Naturally, we were very positive about it. We like it, we’re looking forward to it.
“It’s a small window of opportunity,” he added, “but it makes a huge difference in the sense that if you’ve got a car that’s only worth $500, you have an extra $3,500 or $4,500 to put toward a down payment.”
The voucher will be an automatic deduction for eligible car shoppers and will be honored by car dealerships that register for the program.
When a consumer buys a new vehicle, the dealer will submit required information to the National Highway Traffic Safety Administration, which will ensure the purchase meets the requirements of cash for clunkers.
If the purchase is eligible, the National Highway Traffic Safety Administration will issue a financial credit to the dealer to pass on to the consumer. Then car dealers must surrender the vehicle to an entity for disposal.
“We believe it will definitely help,” said Sean McGuire, sales manager at Gettel Toyota, on 14th Street West in Bradenton. “For vehicles that don’t have a whole lot of trade-in value, to get $3,500 or $4,500, it almost increases the value of vehicles.”