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When it comes to new, fuel efficient automobiles, it's a seller's market and buyer's market at the same time thanks to the federal government's "Cash-for-clunkers" program.
Car shoppers caught up in the frenzy of ‘‘cash-for-clunkers’’ now have more time and a $2 billion reason to trade in their old gas guzzlers.
President Barack Obama signed into law Friday a measure tripling the budget of the $1 billion incentive program that has drawn big crowds to formerly deserted showrooms. The Senate on Thursday passed the legislation extending the two-week-old program into Labor Day and preventing it from running out of money.
‘‘Now more American consumers will have the chance to purchase newer, more fuel-efficient cars and the American economy will continue to get a much-needed boost,’’ Obama said in a statement hailing the vote.
The extra money is aimed at helping automakers and spurring the economy while removing some of the least fuel-efficient vehicles from the road. Last week, the government said the program’s funding would be exhausted by Friday if it was not replenished.
Through Friday, the most recent data available, $1.03 billion had been spent on the program, accounting for the sale of 245,384 new vehicles. Administration officials estimate the new money will last into Labor Day and could prompt an additional 500,000 vehicle sales.
Dealers said the additional money would help them maintain a sales pace they haven’t seen in months and continue to benefit from heavy publicity surrounding the rebates. Car dealers saw an uptick in sales in July, when Ford Motor Co. achieved its first year-over-year sales increase since November 2007.
The program has been popular in Meridian, with auto dealers rejoicing over the many new cars they've sold under the program. Buyers are rejoicing over the $3,500-$4,500 savings on their new vehicles.
Under the cash-for-clunkers program (also referred to as Car Allowance Rebate System or CARS) vehicles with poor fuel mileage are given a trade in value of $3,500-$4,500 for buyers who purchase a brand new fuel efficient vehicle. The program is part of the American Recovery and Reinvestment Act.
Under the program, car dealers are reimbursed by the federal government for the discount on the new vehicles. The old vehicles are turned over to the government to be destroyed, said Paul Johnson, sales manager at Johnson Dodge Kia.
Johnson said his dealership has been selling cars "every day, all day long," through the program, which began July 24.
"We've gotten a ton of interest," he said. "Everybody wants to sell a clunker."
"We've been slammed," said Will Wilkinson of John O'Neil Johnson Toyota. "We've done 34 of them so far... It's been a good shot in the arm for our industry."
Milburn Van Veckhoven, owner of New South Ford Nissan, is another fan of the program. "It's working real well," he said. "Lots of people are very interested in it. We're selling lots of cars... I'm real happy with the program."
At Johnson Dodge Kia, Johnson said cash-for-clunkers has increased sales, not only for people with eligible clunkers, but for others as well.
"People are excited," he said — so excited that they sometimes buy new cars even when they find out their old car is not eligible for the program.
"It's probably the best stimulus program there is. You can actually see it working," Johnson said. "A lot of these people have never owned a new car in their lives, and they're able to get a new car for less than they would have spent on a used car."
"It's definitely increased business at most stores," Wilkinson said. "Probably the 34 people (who bought cars from his dealership through the program) wouldn't have been able to buy new cars otherwise."
Johnson said his dealership has seen a big increase in traffic since the program began. "We just had a flood of customers that first weekend (of the program)," he said.
"We started seeing it in June," said Wilkinson. "People wanted to make sure they were eligible by the first day."
Both Wilkinson and Johnson said they have had customers who didn't realize they were eligible for the program when they came on the car lot looking for a used car, but bought a new one once they found out they were.
On the other hand, Wilkinson said, there have also been plenty of people who thought they were eligible but found out otherwise once they got to the car lot.
In order to be eligible for the program, the trade-in vehicles must get 18 miles per gallon or less, be less than the 25 years old, and have up-to-date insurance for the past 12 months, among other things. To qualify for the $3,500-$4,500 trade-in value, the owner of the car must purchase or lease a brand new fuel efficient vehicle.
For more information on eligibility requirements for the cash-for-clunkers program, visit the official Web site at www.cars.gov.
