Park City dealerships: Cash for Clunkers a success
September 1, 2009
The Federal Cash-For-Clunkers program ended Aug. 24, and Summit County’s two remaining new vehicle dealerships on Rasmussen Road say it was great for business.
Mike Hale, owner of the Chevrolet dealership in Park City, said he usually sells an average of 30 vehicles a month. Because of the recession, some months have been as slow as only four or five sales.
During Cash For Clunkers, he sold almost two dozen. Only eight of those were actually part of the program. The rest were from people showing up on the lot to ask questions and seeing what he had to offer.
"It was very consistent," he said. "It absolutely worked."
Many of the vehicles locals wanted to trade in didn’t qualify. People around here care about their environmental impact, he said. They already drive efficient cars. But when they saw the better gas mileage on new sport utility vehicles, they decided to buy a new car anyway. One vehicle has improved by 10 miles per gallon in only one year.
"There was a huge pent-up demand because there are cars that need to be replaced or people are tired of. This program gave people the reason to come in and look, and they were impressed that old vehicles that got 15 miles per gallon now get 30," he said.
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Robert Crandall, owner of the Ford dealership, said he also sold eight cars through Cash For Clunkers despite not promoting it. People just walked in and asked.
Crandall didn’t know his exact numbers, but said there was an uptick in business.
"It definitely was a great stimulus for traffic," he explained.
Critics of Cash For Clunkers have often been in the business of selling or repairing clunkers. The trade-ins had to be destroyed as part of the deal, taking cars off the road with bad gas mileage but that still had several years of life in them. Hale confessed it was difficult to see 10-year-old SUV’s destroyed.
Local mechanic Tom Gordon, manager of Mercer Automotive, said mechanics had nothing to fear from the program. Even though he’s got mixed feelings about it, he too, declared it a success.
"The U.S. doesn’t need to keep a lot of these clunkers on the road. People who can use the program should. Repairs will always be there. Cars need maintenance in addition to repairs," he said.
Now that the program is over, Hale and Crandall said they aren’t quite ready to relax.
Despite the boost, Hale said he’s noticed half the people in town who bought a new car this year went down to Salt Lake City. He said he’s committed to giving locals a good deal, and wants a larger share of that market.
Crandall said the application process for the program was far more than he bargained for. In order to be compensated for the $4,500 voucher, he had to submit complicated paperwork. If any of the buyer’s information on it is wrong, he worries what will happen.
"The administration of (the program) and the web site were just terrible," he said. "It takes ‘Dotting the I’s and crossing the T’s’ and gives it whole new meaning. The whole thing has been nerve wracking."
Before Congress agreed to give the program more funds, dealers were worried that any mistakes in paperwork would lose their place in line and they potentially might not be compensated. Now it’s a matter of time, but only about 10 percent of the money has been paid to dealers thus far.
"Now all our working capital is outstanding," he said. "Dealerships don’t have that kind of money to allow the government to just float on them."
The kinds of cars that qualified for the program had lower profit margins. If any of the applications fall through, or the government fails to pay, the profit margin on all eight will be eliminated, he said.