$2 billion more for ‘clunkers’
Published 9:36 pm Friday, July 31, 2009
Just how much do you think that beat-up car or truck sitting in the garage is worth?
According to the U.S. government, it could be worth about $2 billion.
The U.S. House of Representatives voted Friday to put $2 billion more into the Car Allowance Rebate System, better known as the “Cash for Clunkers” car purchase program, which has already spurred about $1 billion of business in just a week.
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The additional funds are necessary, because the initial $1 billion that was set aside for the program is not expected to be enough to meet the overwhelming demand.
The program was created to help boost lagging auto sales by offering car owners up to $4,500 for trading in their qualifying old cars for new ones that have better gas mileage.
“Consumers have spoken with their wallets, and they’ve said they like this program,” Rep. David Obey (D-WI) said in an Associated Press report Friday.
But consumers are not the only ones who like the program.
Local car dealerships have been enjoying a welcomed increase in business, thanks to the new initiative.
“We have probably doubled or tripled our business just in the last week,” said Darrell Mayo, sales manager for Starr Motors in Suffolk. “It’s been a very positive program. It’s probably the first stimulus program that has been given directly to the people that has been successful, in my opinion.”
Bob Barton, president of Barton Ford in Suffolk, said the program has inspired people to get into the cars they want.
“The program has definitely caused a stir out there,” Barton said. “We’re definitely getting more traffic out there than we have in previous months. There is plenty of folks that have held on to their vehicles, and they have seen now an opportunity here to get into something a little bit newer and more affordable.”
Eley Duke, vice president of Duke Automotive, said the popularity of the program has been unparalleled.
“The popularity of it so far has been tremendous,” Duke said. “I really haven’t been able to go anywhere without people coming up to me and asking about it. It’s out there, people know about it, and there’s a lot hype around it.”
Duke said his dealership saw an increase in sales in the past week, and the sales were mostly in the buyer’s favor. He said the average vehicle being turned in was eight to nine years old and had about 200,000 miles on it.
“It’s the people that have really benefited,” Duke said. “Some of these cars may been worth about $200 to $500, and they got $4,500 for it.”
Duke said the only problem he has encountered with the program has been that, because of the overwhelming response, dealers have had trouble connecting to the dealer’s Web site to complete the necessary paperwork. But, he added, that’s not the worst problem to have.
“They’re saying that there have been 200,000 deals done,” Duke said. “That just shows right there that the program has worked. I think it’s a good thing. It’s helped stimulate the economy, and we’re moving some cars, and we’re taking some cars off the road that probably don’t need to be there.”
The U.S. Senate is scheduled to vote Monday on whether to add more funds into the program.