U.S. auto dealers today were grappling with the blessings and curses of the U.S. governments Car Allowance Rebate System, or CARS, program, better known as cash-for-clunkers.
A Thursday survey by the National Automobile Dealers Association of 2,000 dealers found evidence of a backlog of nearly 200,000 pending claims that, if filed, would probably deplete the program's $1 billion budget, an NADA spokesman said.
The program, which began processing dealer claims for reimbursement of $3,500 to $4,500 consumer credits on July 24, was supposed to continue through Nov. 1.
An estimated 16,000 dealers are eligible for the program. Here is a compilation of some of their stories:
Could be 'greater damage done than good'
Chrysler dealer David Kelleher, who owns two stores in the Philadelphia area, spent this morning frantically trying to freeze $30,000 in cash-for-clunkers advertising he had placed.
With the federal program going full steam, Kelleher had applied for and received a temporary zoning variance to put up special signs and 30-foot dumpsters in front of each of his dealerships. His TV ads trumpeted his expertise in clunkers and were tied to Chryslers offer to match the government offer with up to $4,500 in cash.
Local television stations sent crews out to film a forklift as it hoisted an old junker into one of the dumpsters.
Then there was his targeted mail campaign, already en route to customers.
The direct mail hasnt even hit their mailboxes with a $750 incremental offer.
Were just getting warmed up, Kelleher said. They (the federal government) are about to tell the whole world the partys over. If they dont go ahead and say we have a temporary extension, the momentum is going to freeze, and we could arguably have in a sense greater damage done than good.
Interest has been 'insane'
Michael Garringer, commercial fleet manager at Thorson Motor Center in Pasadena, Calif., says his dealership stopped making deals under cash for clunkers at about 3 p.m. Thursday after hearing rumors that the federal government might be shutting down or suspending the program.
He says consumer interest has been insane and that the store sold five vehicles under the program in three days. But he also points out that of the three General Motors brands he sells -- Pontiac, Buick and GMC -- only Pontiac had enough fuel efficient vehicles to really take advantage of the program.
I had people wanting to trade-in a one ton truck for a one-ton truck, he said. I said no, you dont understand the program. It serves the imports better. Volkswagen, Honda and Toyota have more four- and six-cylinder cars.
Hotline put on speed dial
John Reagan, owner of Reagan Honda and Reagan Hyundai in Jefferson City, Mo., stopped doing cash-for-clunkers deals Thursday morning.
I have so many deals laying there, he said. Im not even getting any e-mails on the ones that theyve denied. Wednesday night was the last time I got any communications from them at all.
His two stores had sold 42 qualifying deals, but employees are still working on entering them into the online system today -- so far unsuccessfully. The Web-based process is still confusing, even after staying at the store until after 1 a.m. last night, he said.
And thats been almost every night this week, and coming in at 6 a.m. in the morning, just trying to get into the system, he said.
Reagans stores have had eight transactions rejected, two of which were rejected twice. One of his deals was rejected because the consumer had the name Dan on his trade-in title and used his legal name, Daniel, on his new-vehicle paperwork.
Finally, his staff put the government cash-for-clunkers hotline on speed dial.
We just sit there and keep hitting the speed dial time after time after time, he said. Well finally get in, and weve gotten to where you sit there and wait for the agent, and then we just get kicked out.
Then, his general sales manager thought of hitting his phones star key and then the pound key when the hotlines automated menu began, which he called an old trick to getting through to an operator.
The first time he tried that, someone took his cell phone number and promised he would get a call before the end of the business day Thursday. But that didnt happen. And hitting star-pound later in the day only got him a busy signal.
Reagan said he received an e-mail this morning from American Honda Motor Co., but that only referred dealers to a business bloggers reference to a news report.
In the meantime, one customer wants to take delivery of her new vehicle, but the dealership cannot guarantee her the government will cover the cost of her voucher.
Shes mad at us because we cant get an answer, Reagan said. Its coming down that its going to be the dealers fault, and well get the bad rap on it.
Could have been a lot easier
Ed Dreiband, owner of Northwest Honda and Northwest BMW in Owings Mills, Md., says he sold 20 new vehicles under cash for clunkers but he never got a chance to register for it.
Thats because he never received his registration number that was sent through regular mail, he said.
When he called the National Highway Traffic Safety Administration it said the number was sent by regular mail on July 17. It also advised him to check with his manufacturers who supplied information about dealers to the government to make sure the information was accurate. His manufacturers tried to get the numbers for him, but the government would not release them, he said.
Though frustrated, Drieband says he believes he will eventually get the money he is owed. And he also believes the process could have been much simpler.
They should have let the dealers start to register on July 1, he said. I think it is an excellent program but I feel it could have been a lot easier.
Im an eternal optimist
Even with all of the information and misinformation being disseminated about the cash for clunkers program, Roger Mercer, owner of Mercer Nissan, Mazda in Lufkin, Texas, says he believes its going to work out.
So his first thought was to go ahead and deliver the Nissan Altima, Versa, and Rogue, his customers purchased under the program and were set to pick up on Friday morning.
After speaking with his sales manager, hes still optimistic. But he had a change of heart about the deliveries.
The customers are buying high mileage, mid- to small cars and they are also low profit cars, Mercer says. You make $150 to $200 on the front end and were gambling on $3,500.
Im an eternal optimist, but Im putting this on hold.
Foot on the accelerator
Ron Panici, sales manager for Town & Country Ford, in Nashville, Tenn., is confident that the discussion of ending the program is a ruse -- and that theres plenty of money.
Its the takeaway close, the strategy a salesman uses to get the customer to commit to the purchase, he says. This programs being run by a car guy.
His store has sold 15 cash-for-clunker deals so far. Our inventory is going to run out before this program does. Ive had 25 dealer trade calls in the past two days. Other dealers are running out of inventory, too, he says.
The store has a dedicated person assigned to helping customers with cash-for-clunker deals. They ran a full-page ad in the local newspaper under the headline, Town & Country Ford is your headquarters for cash for clunker.
The store spent $20,000 on a direct-mail program to promote cash-for-clunker deals. Previously, they had cut back advertising for July, but their cash-for-clunker-oriented advertising is just now kicking in.
When we heard that they might cancel the program, we decided we didnt care, Panici said. Its working. Were not going to take our foot off the accelerator.
There is still a lot of confusion among consumers, though. One customer brought in a Honda Civic, unaware that it didnt qualify as a trade-in. Another wanted to use the program to buy a Ford Explorer; instead, the store sold that shopper a Fusion.
The store didnt have any banners or posters promoting the program. Asked why, Panici said they didnt feel they need anything because customers already knew about the program. He said, Who has thought about buying a new car in the past year who doesnt know whats going on?
'Were dealing with the federal government'
The showroom of Dunn Pontiac-Buick-GMC in Madison, Tenn., has a large white banner, saying, CARS registered dealer. Jeremy Vines, new-car sales manager, is awaiting official word as to whether he should take the sign down.
He called another manager in his organization, and got online, trying to find out whether the program was still on.
The dealership ran a full-page ad in Fridays Nashville Tennessean newspaper, prominently displaying an attractive woman and Cash for Clunkers in large type.
The store had to commit to its weekend advertising Thursday afternoon.
Ive built my whole weekend new-car ad program around clunkers, says Vines. If its canceled, Im sure were going to have some upset customers coming in here. Hopefully, theyll understand that its out of our hands and were dealing with the federal government.
In the last week, the store did 12 cash-for-clunker deals, Vines said. In every case, the paperwork was accepted.
He has sold 31 new cars so far this month, which is double the normal volume for the dealership, located along metro Nashvilles main auto row.
The program is driving traffic to our showroom, he said. Our new-car sales are up because of the buzz.
'They're just in a hurry'
Dealer Mary Gezon Huizenga of Gezon Motors in Grand Rapids, Mich., said her stores general manager called the government hotline (866-227-7891) this morning.
They said it was erroneous reporters getting key-happy, Gezon Huizenga said. They said, Go ahead and process.
Gezon Motors had canceled the 18 cash-for-guzzlers deliveries it had scheduled for today through Wednesday, but Gezon Huizenga said her staff was now trying to get all of those customers in the store today.
Theres a couple of guys that are going to be texting (customers phones) as we speak to get more people in until we get the next key-happy update, she said.
The Gezon Motors staff had been in the office late Thursday night until they got the last of their 35 completed deals filed into the government system at 11:44 p.m. Gezon Huizenga said she was getting rejections for some of those applications this morning. One said the trade-in vehicles title was not free-and-clear of liens.
Ive got the title in front of me. We scanned it in. There was no secured interest, she said. I think theyre just in a hurry.
Other dealers Gezon Huizenga has spoken with said they werent even in a position to get rejections yet.
We have dealers calling us going that they never got one deal into the system, she said.
'If they say go, well keep going'
John Grow, who owns Gibbons Ford in Dickson City, Pa., outside Scranton had sold about 50 cars from Saturday to Tuesday, in addition to the dozen or so he had pre-sold. But before the cash-for-clunkers program was reportedly set for suspension, his store had barely started entering the deals into the federal system.
Our guy tried for 10 hours yesterday and managed to get nine deals into the system, he said today.
For now, he said, the dealership is putting the program on hold.
Were going to sell the vehicles contingent upon them continuing the program, and were not going to let them take delivery until we know what the heck is going on, Grow said.
Grow said he trusted a White House spokeswomans comment to Automotive News that the program was not suspended. But were probably going to wait until later in the day to make sure, he said. If they say go, well keep going.
'They transfer you to somebody else'
Jerry Golinvaux, a Chrysler-Jeep-Dodge dealer in Roseville, Minn., said Wednesday afternoon he had submitted 35 deals so far and hadn't been notified that any of them have been approved.
"We've received two rejection notifications back, and the notifications don't give any indication of why" they were rejected, he said.
Applying online for each reimbursement takes "a minimum of 25 minutes," he said. And he hasn't had much luck getting help from the federal hotline.
"You get hold of somebody after waiting an hour and a half, and that person doesn't know the answer," Golinvaux said. "So they transfer you to somebody else. They transfer to somebody else, and then you get a dial tone."
Arlena Sawyers, Bradford Wernle, Chrissie Thompson, Lindsay Chappell and Neil Roland contributed to this report