Local dealers hope ‘clunkers’ plan is refueled

BRADENTON — Car dealers in Manatee County were happy to learn Friday more money could be pumped into the popular, yet cash-strapped, “cash-for-clunkers” program.

The House of Representatives approved an additional $2 billion for the program that originally received $1 billion to issue consumers trade-in rebates for purchasing a new vehicle.

The Senate is expected to vote on the measure next week.

“We’d be more than happy if they did give extra funding,” said Mike Fulford, a sales manager for Red Hoagland Pontiac GMC.

The Bradenton car dealership has sold an estimated six vehicles from the cash-for-clunkers program, which started seven days ago.

The new vehicle purchase program gives rebates of $3,500 and $4,500 to consumers who ditch a car that gets 18 miles a gallon or less. Buyers get a $3,500 rebate if they purchase a car that is more fuel efficient by four miles, and a $4,500 rebate is given to those buying a vehicle more fuel efficient by 10 miles.

“The response to the program here was pretty good,” Fulford said.

The consumer turnout nationwide was overwhelming, thus the vote for additional funds.

Lawmakers considered suspending the program after Friday over fear that the funds were exhausted. Cash-for-clunkers will continue for now because of the House’s approval, and the Senate is expected to approve the additional $2 billion.

According to cars.gov, an estimated $779 million remained in the program. However, remaining funds could be far less as dealers have reported the government Web site frequently crashed or stalled and there could be a backlog of purchases in the system.

Matt Woods, general manager of Honda Cars of Bradenton, says he experienced those problems when reporting cash-for-clunkers sales.

Honda Cars of Bradenton sold an estimated 17 vehicles from the program.

“If they could have a good sense of what has not and has been spent we wouldn’t be in this situation,” Woods said.

Woods added there is fear among smaller dealerships that they could be footing the bill on rebates if there is a backlog and money has run out.

“It’s creating a lot of panic and hysteria for dealers that don’t have a lot of working capital, that they could run into a cash flow problem,” Woods said.

To Edward Dreyer, manager at Chrysler Firkins in Bradenton, the program should have been allocated more money from the start.

Congress had originally considered approving $4 billion for the program.

“They should have left it at the $4 billion,” Dreyer said. “I know they didn’t know it was going to do as well as it’s done, but they should have left it at $4 billion in the event that it might do well.”

Still, local car dealers are optimistic lawmakers will approve the additional $2 billion next week.

Chrysler Firkins has already sold an estimated 20 new vehicles from the program.

“We’re very hopeful that it might happen,” Dreyer said.

Congress approved the rebate program in an effort to boost auto sales in a year when new vehicle purchases are projected to be in the gutter.

According to Motor Intelligence, car sales in June were down 27.7 percent from June 2008. And new car sales this year projected to see a 40 percent decline from the 16 million new vehicles purchased in 2007.

“One billion got us 250,000 new car sales (nationwide). It’s really a drop in the bucket,” Woods said. “Another $2 billion will get us another 500,000 cars. We’re still a far cry from the 16 million (car sales) we had.”