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Will supply of new cars hold out as ‘cash for clunkers’ program goes on?

By Steve Huffman
shuffman@salisburypost.com
The Senate on Thursday voted to approve $2 billion to “cash for clunkers,” extending the program intended to get old cars off the road.
President Obama signed the measure into law Friday.
Locally and across the nation, the program has proven popular. In some regards, too much so.
“It’s definitely picked up activity at our business a lot,” said Bruce Earnhardt, general sales manager of Cloninger Ford on Jake Alexander Boulevard. “Our trouble is getting cars. My prediction is we’re going to run out of inventory before we run out of (incentive) money this go-round.”
The first $1 billion approved by the Senate last month for the program was used up in a hurry. Apparently a lot of people had clunkers they’d been considering getting rid of and jumped at the opportunity.
The program ó known officially as CARS, or the Car Allowance Rebate System ó allows up to $4,500 from the government for those trading in old gas guzzlers for new cars that get significantly better mileage.
Earnhardt said the problem with the program is that the demand for smaller cars has outweighed supply. Ford, Earnhardt said, is having trouble producing enough Focuses, Escapes, Fusions and Rangers.
He said a dealership in Virginia is sending someone to Salisbury today to pick up a new Ford F-150 pickup on the lot here. But Earnhardt said he agreed to the deal only if the Virginia dealership delivered an Escape to Salisbury in return.
“We’re using leverage with other stores,” he said.
Earnhardt said one of the positives about cash for clunkers is that the $4,500 rebate comes from the government and goes straight to the dealership.
“Everyone thought this was a gimmick and it’s not,” he said. “The money is out there. It’s guaranteed as long as the car qualifies.”
Among the stipulations, the cars being traded must be no more than 25 years old and get 18 miles to the gallon or less. The new vehicles can’t exceed $45,000 in price.
Robert Kurfees drove from Mocksville on Friday to close the deal where he was trading a 1990 Lincoln Town Car on a Ford Fusion as part of the CARS program. Kurfees said his Lincoln really wasn’t a clunker, but he couldn’t come close to the deal he was getting on his new car without the program.
“It’s a deal, I’m telling you,” Kurfees said of the offer that Cloninger was making him.
Through cash for clunkers, all trade-ins must be crushed, a fact that Kurfees said bothered him a bit.
“I hate to see it getting crushed,” he said of his Lincoln. “But if that’s the deal, that’s the deal.”
Kurfees said he approved of the program, noting that it’s typically large corporations and their CEOs who benefit from government deals.
“Why not let the little folks get a little something?” Kurfees asked.
At Ben Mynatt Nissan, Sales Manager Jeff Moore said he was glad the program was extended, though he also noted, “Getting money from the government is like pulling teeth.”
He said about half of the cars sold at his dealership over the past month were part of the cash-for-clunkers program. On most of those deals, Moore said, the dealership is still waiting for money from the government.
“It’s really cut and dry,” he said of the cars and trucks traded as part of the program. “They either qualify or they don’t. There’s no agonizing.”
Moore said there have been a few instances where individuals have been surprised to learn their cars didn’t qualify. Moore recalled one woman who thought her 1984 Oldsmobile Cutlass would surely classify as a clunker.
But he said the car was rated at 19 miles per gallon when it sold new, meaning it couldn’t be included. Moore said the woman was dismayed at the news, noting that her Cutlass doesn’t come close to that kind of mileage nowadays.

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