The U.S. government's nearly $3 billion cash for clunkers vehicle scrappage program fueled a sales bonanza at a time when the industry desperately needed it, amid the depths of the Great Recession in July and August 2009.
And NADA was a driving force behind it.
In a frenzy that helped draw showroom traffic to deserted dealerships, nearly 700,000 vehicles were traded in through the Car Allowance Rebate System, which gave consumers up to $4,500 each to trade in an old gas-guzzler for a more fuel-efficient new model. The seasonally adjusted annual sales rate climbed to 11.4 million in July -- topping 10 million for the first time that year -- only to be blown away by August's 14.6 million SAAR.
NADA executives and staff helped at key stages, from lobbying for the legislation to helping regulators implement the program and urging Congress to appropriate more money.
NADA first encouraged a government-funded vehicle scrappage in the fall of 2008, as the domestic auto industry was sliding into crisis. The idea was included as one option in a letter that NADA's then-President Phil Brady hand-delivered to a White House contact.
"We needed to create foot traffic in showrooms, literally," recalls Dave Regan, NADA's head of legislative affairs. "It is hard to overstate just how toxic the economy and climate was and that's what in essence cash for clunkers was about: to stimulate people going to the dealerships."
By the spring, as General Motors and Chrysler were preparing for government-orchestrated restructuring, legislation for a clunkers program began to gain traction in Congress. NADA officials and automakers aggressively lobbied for the program, which was signed by President Obama in late June 2009.
Then the hard work began.
NADA staff worked with the National Highway Traffic Safety Administration to launch the program, meeting in marathon sessions involving dozens of people to educate the agency on the nuances of the new-car purchase process and craft how the program should function.
The program had to begin in "a period as short as possible so you don't kill yourself before you get the program launched" by customers delaying purchases, said Andy Koblenz, NADA's executive vice president of legal and regulatory affairs. It took effect in late July 2009, and demand surged.
Regan recalls that NADA surveys indicated that the program would burn through its $1 billion appropriation in a matter of days. If that occurred during Congress' August recess, dealers would have been left with potentially hundreds of millions of dollars' worth of clunkers discounts they fronted to customers, expecting to be reimbursed by Uncle Sam.
"Our hair was really on fire leading up to the August recess," Regan said. "We knew from our surveys that the well was going to run dry."
NADA urged the White House to support more funding. The Obama administration, Koblenz said, eventually came around. NADA mounted an 11th-hour push to Congress. The additional $2 billion came on July 31, 2009, just before the recess. Even with that, funding ran out before August was over, well before the November end-date expected by regulators.
"It took the White House, House leadership, Senate leadership and the grassroots push to make it work," Regan said.