November 21, 2009
What's Inside:
Car sales thrown into reverse
Buying fervor dies down after Clunkers program's end
Buying fervor dies down after Clunkers program's end
Photo by Jessica Stewart / St. Joseph News-Press / Purchase this photo
The Cash-for-clunkers program is over and dealership lots like the ones at Rolling Hills Auto Plaza are bare according to Mike Williams, general manager.
The frenzy of new-car shoppers has wilted with the end of the government’s cash-for-clunkers program, and most area dealerships that sell foreign-made vehicles are nostalgic for the good ol’ days of July and August.
“My lots are just bare right now. Everything we had we literally just about sold out,” said Mike Williams, general manager at Rolling Hills Auto Plaza, which sells Toyota, Honda, Nissan and Scion vehicles. He watched Tuesday as the last of 147 mostly domestic vans, trucks and sport-utility vehicles were towed away.
Three blocks away, at Anderson Ford Lincoln Mercury Suzuki Kia, sales manager Brandon Minton said more than half of the 104 new cars sold under the government program were of the Kia brand, especially the Kia Spectra. He calls the program a “phenomenal success.”
The Ford Focus and Ford Escape were the only domestic vehicles that made the cut for the top 10 vehicles purchased in the clunkers program. Top sellers were the Toyota Corolla, Honda Civic and Toyota Camry.
Like buyers nationwide, St. Joseph residents were buoyed by rebates up to $4,500 to trade in old gas-guzzlers for a new, fuel-efficient vehicle. Customers snatched up 700,000 new cars across the country, and the government paid nearly $3 billion toward those purchases.
At Rolling Hills and
Anderson, dealerships where a big part of profits come from new-car sales, the clunkers program was a boon that has carried somewhat into September, traditionally a slower month for auto dealers. Both dealerships say sales are steady as they replenish their inventory.
But for dealerships that primarily sell used cars, the clunkers clamor has largely passed.
Fewer than 12 new cars were sold under the program at Cecil Myers Mitsubishi. Customers bought 15 new vehicles through clunker trade-ins at Greg Buick Pontiac Cadillac. Nearly 70 percent of sales at both dealerships are used vehicles.
Cheaper and high-mileage cars are “bread and butter” for used dealers and wholesalers, but many of those affordable minivans, pickups and sport utility vehicles have been absorbed by the clunkers program, said Dave Campbell, general manager at Cecil Myers.
He bemoans the loss of those lower-cost vehicles, which he says will hurt some buyers in an economic downturn. He also blames the program for loss of auto parts on still-drivable clunker vehicles that are crushed rather than salvaged through a government program that mostly propped up foreign automakers.
“The dealership lots right now are like a ghost town,” Mr. Campbell said. “The government has crammed a whole lot of deals in a short period of time, which they have no business doing. And so your natural balance has disappeared.”
Mr. Williams, the general manager at Rolling Hills, counters by saying most foreign-made vehicles sold in the program are actually assembled in the U.S.
He said salvage yards can also sell parts from the clunkers for several days before the vehicle is crushed. The engine, transmission and body are excluded.
“The engine and trannie are what cause poor emissions, so it can’t be sold,” Mr. Williams said. “This has been a good program for us. People just don’t understand it.”
Ahmad Safi can be reached at ahmadsafi@npgco.com.
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Mr. Williams said. “This has been a good program for us. People just don’t understand it.”
No ..I understand it. Go to your local bar and offer to pay for free beer for everyone and the place will soon be packed and labeled a raging success. But when the free beer stops, you will have just another dive littered with beer cans you have to clean up and the 2 places down the street will be closed because of lack of business.
This was the single biggest scam I have ever witnessed. Give away our money to prop up numbers to somehow show the economy is better. We own GM and Chrysler already, so we should get cars a factory cost. Thats great, lets see how they do in October and November.
And I don't give a damn where they are assembled, Toyota,Nissan, and Honda are all foriegn cars we bought to help put small business like used car dealers that have been around here for years out of business.
The only people who may have won on Cash For Clunkers were those who traded a vehicle worth less than $1000. I understand taxes will need to be paid on the $3500 or $4500 which was "given" to the buyer. By the time he pays taxes next April 15, lost a discount most dealers had earlier placed on the new car and now makes payments with interest, it is very unlikely anyone with a traded vehicle valued at more than $1000 will ever make up the difference in gas saved. Nationwide we will save about $350 million in gasoline cost at a cost to the tax payers of $3 billion. Doesn't sound like a good deal to me for anyone.
Besides the accurate comments of the above two posters the domestic auto makers weren't even the primary recipients of whatever "benefits" this program produced.
From the article above-
"The Ford Focus and Ford Escape were the only domestic vehicles that made the cut for the top 10 vehicles purchased in the clunkers program. Top sellers were the Toyota Corolla, Honda Civic and Toyota Camry."
AFS,
You got the same email I got! You know the one that lists all kinds of figures on how big of a scam the clunkers thing was. Well instead of spreading the info from the email like it was the gospel, I decided to check the facts. Guess what? it's BS!
Here's a link:
http://www.snopes.com/politics/gasoline/clunkers.asp
AFS don't believe everything in your inbox, you could find yourself heading to Nigeria to claim an inheritance from a wealthy American oil man with no heirs.
Nationwide we will save about $350 million in gasoline
That is crap also. The 2 top sellers right now are a Camaro and an Audi that get 17 mpg. And SUVs and Pick Ups rolled off the lot at the same time that a Focus did, getting worse mileage than that. So what was it we gained again? We crushed up 700,000 Gas guzzlers and sold that many new guzzlers.
RK, you and I completely agree on this topic.
AFS, really - the people that have commented will not be swayed by your propaganda.
BJ Minton is touting the successes, of course... he's a SALES manager!
What he, and people like AFS fail to understand, is that people driving "clunkers" were most likely doing so for a reason - they couldn't afford a new car.
The CARS program was different from sub-prime lending in only a few ways. At least with sub-prime lending old houses weren't bulldozed and destroyed.
Other than that, we now have people financing cars that have no means to pay them back. For crying out loud multiple car companies will even make 6 months of payments if you lose your job and I don't remember which, but one manufacturer will take your car back with no negative marks on your credit if you can't pay. What the hell.
YOU CANNOT PROP UP FAILING BUSINESSES WITH CASH INJECTIONS - in doing so we have effectively created a tourniquet. The only problem with tourniquets is that after the bleeding stops - you lose the appendage.
The CARS program was actually worse than TARP, let me tell you why. In the TARP programs, banks that were failing actually got the money. Our domestic manufacturers, for which this was the driving force, received the least amount.
Not to mention there are around 70,000 cars that have FAILED the governments rebate scam and those costs will not be reimbursed to the dealer. Those dealers now complain of the red-tape and hoops surrounding the system but I've said from day one, play with snakes and you'll only get bitten.
Go to bed with the government and you're going to get fleas.
And to top it all off there have been so many good parts destroyed because of this damn program it makes me sick. I do the maintenance on all of my vehicles, the only thing I can't do is rebuild a transmission - why in the hell destroy so many perfectly good parts that there is a demand for?
I'll tell you why - because these idiots have an agenda. They know these things I and other talk about, they just don't care. Name the game and don't play it.
In the end, you cannot force the market to do anything. You can pad it, but it will not last because it isn't telling you it's hungry - the market is telling us it's sick.
This entire economic situation was created by greedy politicians with an agenda and greed on Wall Street that makes a politicians greed look like childs play. Add it up and you have nothing less than an irresponsible child calling the shots in our markets, once-private companies and inevitably our healthcare.
If you think the 70,000 cars not getting reimbursed was bad, imagine that number is people who made a mistake on their government health care claim.
Having the government run anything should make your skin crawl.
l.o.d. too much negativity, what has made you the truth or lie spokesman? well, you have your beliefs too. that's all you have is your beliefs. i on the other hand don't believe not only half of what you write. sorry to offend, just that you are not my spokesman. i am a person who believes that the government is the one that runs this country. we have elected officials that make decisions about you and me.we don't agree on a lot passed that but it is the way of things and we have to change this by vote not hatred. i thought cash for clunkers was a good thing. i have changed my opinion on this one but that is OK too, i never had control of this, nor did you. i don't believe that honest people would buy if they couldn't afford like you do but time will tell.
People do not know the old chevy prism was the same car as the Toyota Corolla. The chevy had a different front clip on it.But it was junk because it had the chevy bow tie on the grille.
my brother worked for gm, and bought a prism. he looked under the hood one day and seen toyota slickers all over the place.
so that is a rich one . just because it had a american manf on it. people thought it was junk.
put a corolla and prism and look at them. only thing that is different is the front clip.
Most cars are junk if you don't take care of them. It doesn't matter what the label is. If you drive them right and maintain them properly they will last quite a while. I have a Expedition with 240,000+ and it runs great doesn't burn or leak oil and I would drive it across the county if I needed to.
Donaldo - you sum up liberal mentality perfectly.
You mistake fact for a matter of opinion. I'm not the "truth or lie" guy, and you can NEVER rebut anything I say unless it's, "deal with it!" or, "we don't agree."
America carries more revolving debt than any other developed country. Fact. Americans have more leveraged debt than any other developed country. Fact.
If anything you should be arguing that, "capitalism is to blame" but you fail to even make the assessment because you don't understand the conversation you're trying to be a part of.
The fact that you can vote bothers me.