'Clunkers' bill jump-starts sales

GLENDALE — Car lots are abuzz with activity and growing sales just one week after the federal “cash for clunkers” program prompted longtime holdouts to start making purchases, dealers said Friday.

Sales are up by as much as 50% at some outlets, and foot traffic has surged as shoppers who might not have otherwise been in the market for new cars are now attempting to take advantage of rebates worth up to $4,500, dealers said.

Consumers nationwide have jumped at the chance to participate in the program with such enthusiasm that the House of Representatives, fearing the $1-billion plan would run out of money, hastily approved legislation Friday to expand it by an additional $2 billion.

President Obama praised the House for its quick action and encouraged the Senate to react accordingly to allow the program to continue uninterrupted.

About 250,000 cars have been sold nationwide in the six days since the start of the program, according to House estimates.

The burst in consumer interest is a dramatic shift from months of sputtering sales as consumers, fearing the effects of the economic pinch, have waited on making big ticket purchases, dealers said.

Owners trading in vehicles with fuel economies of 18 miles per gallon or lower can turn them in for rebates ranging from $3,500 to $4,500, depending on the fuel efficiency of the new car they purchase.

That has helped to pack the pockets of owners of cars worth sometimes as low as $400, suddenly transforming them into motivated car shoppers.

“It seems like this is an actual program that the government put together that is actually starting to stimulate the economy,” said Star Ford General Manager Alex Tamez.

The business impacts for local dealerships of the Car Allowance Rebate System, as the program is formally called, was evident from the types of cars that have been turned in, said Evan Kanes, general manager of Glendale Nissan.

Evans surveyed a row of run-down vehicles in the middle of the Nissan lot, most of which had damaged bodies, torn upholstery and more than 100,000 miles on their odometers.

“I mean this thing has cobwebs on it,” Kanes said, pointing at the wheel well of a white 1996 Jeep Cherokee. “So this was sitting in somebody’s front lawn.”

Car owners of so-called clunkers often had not used their cars or thought about trading them in, but were prompted by rebate system, Kanes said.

Glendale Nissan was selling an average of about 30 vehicles a week in recent months, but has sold an additional 25 cars above that average since the rebates began, he said.

Bob Smith Toyota and Scion in La Crescenta has seen similar trends, sales representative Ron Smith said.

The dealership has typically sold about 10 cars in a weekend since the start of the year, but after the CARS program launched last week, 40 cars were bought off the lot, Smith said.

“It’s been crazy,” he said.

More shoppers have streamed into Community Chevrolet in Burbank because of the program than representatives have seen in recent weeks, general sales manager Jason Warren said.

Although Community Chevrolet’s sales have not increased significantly because of the program, it has created added interest, Warren said.

And while some clunkers’ transactions have not panned out, the increase in visitors has proved fruitful, Warren said.

“We’ve done a few deals where people didn’t qualify, but they were able to buy a car anyway,” he said. “Buyer confidence is definitely on a rise because of it.”

Dealers have, however, had trouble with registering CARS transactions and accessing an electronic system set up by the National Highway Traffic Safety Administration, they said.

The system has frequently been inaccessible and rules for accepting vehicles and payments have changed slightly since the program was meant to be solidified July 24, dealers said.

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