With Senate Vote, Congress Refuels 'Clunkers' Program

By Dana Hedgpeth and Perry Bacon Jr.Washington Post Staff Writers Friday, August 7, 2009


The government's "Cash for Clunkers" program won a much-anticipated extension Thursday night as the Senate voted to give an additional $2 billion in funding to the popular initiative aimed at boosting stagnant auto sales.


The 60 to 37 vote follows House approval of a similar measure last week and appears to save the government plan from an unexpected early shutdown. The White House supports extending the program, and the new funds are predicted to last until Labor Day, Transportation Department officials have said.


"Cash for Clunkers" appeared to be in jeopardy last week just days after its official launch. Congress had appropriated $1 billion for the program, which offers vouchers worth up to $4,500 for drivers trading in their gas guzzlers for more fuel-efficient vehicles. But the program drew so much interest that it almost ran out of funds well before its expected expiration in November.

Transportation officials warned lawmakers late last week that the plan faced suspension.
In a statement Thursday night, President Obama praised the swift passage of the Senate bill, calling the program "a proven success." Obama could sign the bill as early as Friday.


The Senate vote came after lawmakers considered and rejected several amendments to the legislation, including one from Sen. Tom Coburn (R-Okla.) that would have allowed trade-ins to be donated to charity. The current bill requires that the cars be junked.


"Today's vote is a victory for families and businesses all across the nation," Sen. Debbie Stabenow (D-Mich.) said after the vote.


Seven of 40 Republicans crossed party lines to support the measure, while four Democrats voted against it. Auto dealers welcomed the prospect of additional money for the program, which has helped draw customers in droves.


"With the additional $2 billion, even more 'clunkers' will be taken off the road and replaced with more fuel-efficient vehicles," John McEleney, chairman of the National Automobile Dealers Association, said in a statement Thursday night. "Extending the 'clunkers' program benefits the environment and the economy. It's the best kind of stimulus."


Dealerships said they continued to see interest as the program ends its second week.AutoNation, one of the largest vehicle retailers in the country, said consumer traffic was up 35 percent over this time last year at its 225 dealerships in 15 states.


Since the program started, AutoNation has taken in 3,500 clunkers. To keep up with anticipated demand from the program, company executives ordered 45 percent more vehicles in the second quarter from major automakers, including Honda, Ford and Toyota.


"Cash for Clunkers is a huge success," said Marc Cannon, a senior vice president at AutoNation. "It is doing everything they said it would do: creating dealer traffic, clearing out inventory and getting more fuel-efficient cars on the road. This is what the American consumer and psyche needed."

On Wednesday, the Transportation Department published new figures showing that a total of 184,304 trades had consumed $775.2 million of the $1 billion originally appropriated. The Toyota Corolla is the best-selling new car under the clunker program. After the Corolla, the top sellers are the Ford Focus, Honda Civic and Toyota's Prius and Camry.


Of the new vehicles not manufactured by the Big Three, according to a preliminary analysis by the Transportation Department, "well over half" were made in United States. Of the trade-ins, more than 80 percent were trucks, the government said, with Ford's Explorer and F-150 pickup topping the list. The average miles per gallon of the new vehicles is 25.3, compared with the trade-ins that averaged 15.8 miles per gallon.


The program, however, has been plagued by troubles. Consumers were confused as to which cars qualified. Dealers said they have spent hours trying to log on to the government's Web sites to put in paperwork on the deals they completed. Some dealers said they ran into problems collecting government payments.


Transportation officials say they have resolved those issues by adding computer capacity and beefing up contracted staff to help run the program. Some auto analysts and economists are skeptical about the program's long-term impact.


"The Cash for Clunkers at this point is like one of those energy drinks," said Anthony Sabino, a professor of law and business at St. John's University in New York. "It gives you a short-term boost, then you crash and you fall back into the doldrums."

For your best Cash for Clunker deal, visit www.saturnofasheville.com, www.saturnofgreenvillesc.com, or www.saturnofsparatanburg.com for the fuel efficient cars from Saturn with a 5 year 100,000 mile powertrain warranty.

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• Congress OKs $2B refill of 'cash for clunkers' (huffingtonpost.com)

Clunkermania officially began Friday.

The federal government finally released the rules that dealers and their customers have to follow to participate in the much-discussed "cash for clunkers" program, which can provide consumers with up to $4,500 when they trade in an older vehicle and buy a newer, more fuel-efficient model from a participating dealer.
Cash For Clunkers Bill

See If You're Eligible for a Trade In Voucher & Estimate Your Savings!http://www.cashforclunkerscarolinas.com/
$4500 For Your Clunker?

Up To $4500 For Your Old Car From U.S. Govt. Do You Qualify? Find Out
The law creating the $1-billion program went into effect July 1, but many dealers were reluctant to participate until they got a look at the rules. The arrival of the 100-plus-page document Friday morning sparked a registration rush that overwhelmed the government's computers, resulting in waits of two hours or more, the National Automobile Dealers Assn. reported.

The program is also exciting a fair amount of interest among consumers. Online auto information provider Edmunds .com said its traffic has been at record levels in recent weeks. Part of that comes from what may be the beginnings of a rebound in car sales, but the clunkers program is helping.

"We've clearly had traffic coming in that's being driven by 'cash for clunkers,' " said Marc Cannon, spokesman for AutoNation Inc., which owns 77 dealerships in California, including Power Chevrolet lots in Valencia, Hawthorne and Irvine. "We started doing deals early this morning."

Automakers are also jumping on the bandwagon. General Motors and Chrysler ran full-page ads in Friday's Times touting the program, and several manufacturers are offering special incentives.

The government estimates that the program will generate sales of 250,000 new cars, although Edmunds.com Chief Executive Jeremy Anwyl figures that about 200,000 of those sales would have happened anyway as part of the natural retirement rate of old vehicles.

Anwyl also notes that the rules are fiendishly complicated. Much of that is a result of the government's effort to prevent fraud. For instance, the program requires trade-ins to be junked, and the rules include elaborate procedures that dealers must follow to permanently disable the engines of clunker trade-ins so they can't be resold. (Part of the idea behind the law was to get older, less-fuel-efficient vehicles off the road.)

Shoppers may also be in for some frustration, above and beyond the tight restrictions they need to meet to qualify (read on for details on how the program works). For example, buyers must show proof of one year's insurance -- which would be recorded on their policy but may not be reflected on the insurance card they carry in their wallet.

Consumers should also be wary of official-looking clunkers websites that have sprung up, many of them asking for personal information. The official government website for the programs is http://www.cars.gov/ . The government has also set up a hotline at (866) 227-7891. You can also get official information from Saturn of Greenville, Saturn of Asheville, or Saturn of Spartanburg.

Kelley Blue Book (http://www.kbb.com/ ) and http://www.edmunds.com/ offer online calculators to help buyers decide whether a particular deal makes sense under the clunkers program.

Here are some questions and answers about the program.

How do I know if my trade-in vehicle is eligible for the program?

It must have been manufactured in 1984 or later and have a combined city-highway fuel economy rated at 18 miles per gallon or less. The program is advantageous only if the trade-in value is less than the minimum $3,500 offered by the government.

Can the credit be applied to any new vehicle?

All imports and domestics with a list price under $45,000 are eligible, as long as they meet fuel economy standards of at least 22 mpg for cars; 18 mpg for SUVs, small pickups and minivans; and 15 mpg for large vans and trucks. The new vehicle's fuel economy must exceed the trade-in's by at least 4 mpg for cars, 2 mpg for SUVs and 1 mpg for large trucks to qualify for the $3,500 rebate. The full $4,500 rebate kicks in at an increase of 10 mpg, 5 mpg and 2 mpg, respectively.

Remember, the mileage numbers are based on combined city-highway driving mileage as measured by the federal government -- not the mileage you actually get. The fuel economy numbers can be found at http://www.fueleconomy.gov/ .

What happens to the clunkers after the trade-in? Can they be resold?

The Car Allowance Rebate System requires that the trade-in be crushed or shredded so that it will not be resold. The wrecking yard is allowed to salvage some parts for resale, excluding the engine and drivetrain.

Can I game the system by going to a junkyard and buying a wreck to use as a trade-in?

No, the program requires the vehicle be in drivable condition, continuously insured and registered to the same owner for at least a year before the trade-in.

I have several clunkers in my garage. Can I trade them all in?

There is a limit of one trade-in per owner under the program, with the credit applying to the lease or purchase of a single new vehicle.

How long does the program last?

Until Nov. 1 or until the $1 billion is spent, whichever comes first.