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Jul 29, 2009

So this cash for clunkers program in my opinion will cause more problems then good. It is great for the customers that take advantage of it now right away. But the dealers that write these deals and cannot get the money are going to be losing a ton. I am willing to bet that there will be an average of $40-50k lost by dealerships. Remember, a lot of giveaway artists working as a sales people out there too. This is the main cause of profits lost in the first place.

Jul 29, 2009

I am so with Jon on this one. I have watched over the past few weeks car deals get written up under this program before the money was even officially planned to be released. I can see dealers easily lost $90,000 on this program because of how quickly they panicked to make deals.

Also, I was in a very affluent area where 70% of the buyers pay cash and can buy cars whenever they want. We are talking Princeton, NJ. What pisses me off is how these people have the money and can buy a new car at anytime that they want and get rid of their clunker. However, most of them wait for this program to come and take advantage of it. This program should have been created for the average American with certain guidelines.

This is another case of the rich stealing from the government. It is ridiculous.

Also, you would think that this clunker money would allow you to push for holding more gross on the new car. Well, it does not work. So if you want to make money, just sell used cars because it is where it's at.

Jul 29, 2009

Get in, get your deals, and get out. Don't expose your dealership to the very real potential of huge loses.

Jul 29, 2009

Call me a skeptic, but I think more than one dealer is going to be burned by this program before it is all said and done.

Someone mentioned cash flow before, let's say you did a great job like Checkered Flag, but when the money runs out you have 20 clunkers that you have destroyed that you are now unable to get funding on. That leaves the dealer with a loss of $70,000 to $90,000 in funds they will never recover and without the option to retail out of those 20 vehicles. I know of a lot of dealers that a loss like that could close their doors.

Jul 29, 2009

As a customer . . . .How does the dealer think he can "unwind the car deal" after he has disable my engine with the govt approved solution.

My dealer told me that he would give me $100 to replace my vehicle if the govt doesn't deliver.

WHAT!!!

Jul 29, 2009

Alex, spot on about keeping the cars money flowing. I am going in today (on my day off)to process C.A.R.S deals. EVERYONE please fill out the "optional survey" I have heard this will have impact on C.A.R.S. 2.0. Hmm...Can someone get Cardone to refresh the "Swallow Flame" motivational video and change it to a "Gov. Paperwork is fun" motivational video. Good Times!

Jul 28, 2009

Nick, don't worry when the money runs out the new car dealers will go back to sitting on their new inventory and making mini's, while the independent used car dealers are selling cars and making gross

I feel sorry for the guys that have deals done and the money is gone before they can collect. At that point the dealer is in a no win situation, unwind the car deal and piss off the customer or lose $4,500.

Jul 28, 2009

cash for clunkers has done well for us, but its the biggest pain in the ass. i can go on and on and on about the issues with the program. At least it has been a success by driving more traffic.

Nick Lawson · Jul 28, 2009

I dont see anybody talking about small independant used car dealer having to grab there ankles and hold on for this one.

All i know is things have slowed way down since the gov decided they wanted to play car dealer king and pick favorites.

Im happy for some of my collegues with new car stores but im less than thrilled that they are messing with the free market.

Why did they only offer this to "new" car deals?

Just this morning I talk to a guy who wanted to know what I would give him for his clunker and I cant touch what he is being offered with this program by the new car dealership and its not the first time thats killed a deal for me in the last week!

Am i the only one out there dealing with this??

Jul 28, 2009

Look at the line on your check that says "taxes". Still happy about the program? You should be.....you paid for it!

Jul 28, 2009

Andy - even though I am speculating those dollar printing presses will fire up again, it is pure speculation. I could be dead wrong...and hope I am because that means we're showing signs of stability and growth. Your customer is running on his/her pure speculation as well.

Andy Decker · Jul 28, 2009

I had a customer last night who came in and stated that they are going to wait for "next month when the government offers a higher rebate and allows for a higher combined mileage."

...*facepalm*

Jul 28, 2009

Richard - not speaking for Brian, but if the money is gone well before November 1st it will be a big win politically for Obama. He is one of the best DC-marketers I've ever seen and they'll have this in front of the media in 2 seconds. There will be enough political clout on this one, and media coverage, to get more money passed through the House(s) without hassle.

But, the second batch of bucks will probably not have the same affect and they might have to open the requirements some more.

It just all depends on if the money runs out early and if no other political issues surface.

Jul 28, 2009

Brian,

Do you believe the government will allocate more resources if the program is such a big success?

Brian Pasch · Jul 28, 2009

If you start doing the math, this program will run out of money by mid August. While everyone is trying to get all the legal information and processing forms right, the $1 billion is going fast.

If 18,000 dealers register and each does 10 deals in their first week, that 75% of the money gone. Many of the dealers we have talked to and this forum support this, have a few dozen deals done per store.

The Hyundai dealers have been at this for 3 weeks so they easily have dozens of deals done. One of my clients has 60 deals done and most have 15 done per location.

The NHTSA is supposed to provide a "countdown clock" on the CARS website. This clock will be going from $1 billion to ZERO in not time flat.

Dealers will need to keep an eye on this because this program could go from 100 mph to a dead stop in a few weeks.

It will be a bad case of muscial chairs. Imagine booking a deals just to find out that no more money is left. That will be a happy customer.

Jul 28, 2009

John,

"It shouldn’t be this complicated."? Since when is any government program not complicated?

Jul 28, 2009

I'm over-joyed and very nervous. As of yesterday we had over 100 plus deals in our 3 stores plus yesterdays business so the program has done what it was suppose to do, "bring customer in", and they are all mostly good qualified customers with a lot of cash deals. I wonder though if the ones coming in are not just a lot of pent up demand were seeing. If we can get them all processed it will make our month. That brings up the concern. It seems like it will be a "dash for the cash" and a lot of dealers will come up short.Since the money is only good for roughly 250,000 car deals nationwide, which comes out to about 12 per dealer with 19,700 dealers. It only stands to reason somebody will lose. We are doing this well and we are not in a large market so what are they doing in large markets? The key in my opinion is the dealers who get the paperwork right and get the deals in to Uncle Sam fast will get the payoff. We have set up Cash 4 Clunker teams in each store to run the process we have set up so that we can get the deals in quickly and correctly to avoid the potential loss that may come, problem is right now we have added $500,000 to an already negative cash flow and it's growing. Plus will the Govt. change the rules? So it's good but scary!

Jul 28, 2009

Mark - good advice. If we're reading the 136 page document of rules right, along with the other newly added forms to the website, it seems like you have to report the deal to the government within 7 days of doing it. That also requires a status update on the Clunker along with a "killed-for-resale" title. I'm not sure we can really hold onto these clunkers. But if things go as planned, you get the deal recorded with the NHTSA within 7 days, then they get funding for the clunker to you 10 days later. We'll see how well this works, but the way this thing reads, and past promises, there is a 17 day turn around. We're only 4 days into this program now.

Jul 27, 2009

Alex/Jeff,

In my travels from dealership to dealership Friday through today, I have found that my client Chrysler Dodge Jeep stores were "Run over" by consumers concerning the CARS program. (Chrysler's Ad campaign stating the Doubling of the Gov't Rebate program must of worked in my area.)

From personal conversation with these Chrysler Dodge Jeep dealers/GM's, I have found that they are now waking up to the fact (Monday morning) that they may not see these funds for months. The Hangover is on... Is it true that the "Rules Book" from the government is over 100 pages? Online registration of each and every deal is the only way to acquire these funds? Scary...

How long can these dealers wait on a "Recieveable" of $3500-4500 from the gov't? As a vendor, I felt a lot of frustration out there amongest the GM's/Dealers who are taking part in this program. It's a huge risk on their part. (Present Cash Flow.)

In closing, I want to ditto Phillip Zelinger's first paragraph issues above. Also, if I were Alex, I would not let one CLUNKER leave Checkered Flag's lot until I got paid the rebate from Uncle Sam. By the way, did you take the time to check when that CLUNKER was manufactured? If it was made in June of 1984, it's 25 years old and one month. Does it qualify? Think about it...

Jul 27, 2009

I lost a deal on Saturday when the customer wanted to get $4,500 for his '95 Isuzu Rodeo LS 4x4 and buy a 2009 Pontiac G6. His Rodeo rated 15 mpg and the G6 27. On Saturday the gov't website said $3,500 and today it said no classification!
It shouldn't be this complicated. Anyone else experience the same type of situation or can you help me rescue a deal?

Jul 27, 2009

I run the Internet department for a Hyundai store. We got a HUGE bump because of Hyundai fronting us the cash before the 24th. I think that was a brilliant move on their part.

On the last Monday of the month, I am looking at a personal best month, and a whopping 53%+ of our new car sales have been C.A.R.S. deals!

I find qualifying the customer to be very easy, but then again I am used to lots of ...ahem... time consuming questions about rebates, etc so it's just another hurdle in the Internet process for me. If someone has a clunker, I am on fueleconomy.gov before they finish telling me what it is, and it's a yes or no. Simple as that.

Rob Ernst · Jul 27, 2009

Well, unfortunately, we're closing on July 31st so we're not participating. From the outside looking in, it's VERY frustrating because just about every customer who comes in thinks they have a "clunker" and they get $4500. In a LOT of cases, they just have a poorly maintained POS that, if it were running properly, had all of its sensors hooked up and had been maintained, would be getting 22 - 26 mpg highway and 20 to 22 city. Then they want to argue with you about the fact that "their" car only gets 15 mpg so it IS eligible.

You know the drill, "well, I'm going to go somewhere else where they're not trying to rip me off" syndrome.

Fortunately, I'll be moving to another of our stores (Mike Albert Leasing Retail outlet) where they only sell used cars so I still won't be dealing with C.A.R.S. and have the higher gross of used cars.

philipzelinger · Jul 27, 2009

Jeff,

Every experience that you quoted is already a shared frustration but my real fear is in what is yet to come! The first test calls I had for my dealer clients in several markets with the approved "Scrap yards" were equally chilling as they asked me more questions than they answered! Add to that the simple math that suggests that the one billion dollars funding the program will probably run out "mid-deal" for many dealers with the vehicle delivered and no funds in the till and the nightmare of our first experience with "Governmemt Motors" will be indicative of a concerning future!

There is one positive comment that I should add regarding the site that FordDirect.Com posted for their dealers to walk them through the government process. It is extremely organized and they walk their Ford dealers through the process from registration to printing the rebate certificate so my compliments to them and theirs! All qualified Ford dealers received the site info and access codes so I won't post them here, but if you are a Ford Dealer and you didn't know of or use their site - just ask your DSM or go to FordDirect.Com. After all, what are friends for!

Alex Snyder · Jul 27, 2009

I took this photo on the way to work the other morning..what some dealers are doing to get their piece of the Cash for Clunkers pie. I have to admit, it caught my eye. What have you seen? - Jeff

If you're experiencing some good results with the C.A.R.S. Program you're probably excited to have a bunch of cash floating in limbo and a back-lot full of junk! If you're like us, you're probably still hitting refresh on the CARS-Dealer-Marketing site for a store or two. Does that make you nervous?

Add to the limbo-state of things some of us may be in, along with the fact that FuelEconomy.gov is changing the combined mileage stats on some cars and some additional rules & forms magically appearing in the dealer portal you've got to be feeling exceptionally great about this program!

We've now taken over 130 clunkers off the streets, at Checkered Flag, so we're enjoying the champagne right now. After a long meeting about the program processing this morning I'm starting to think the hangover is about to set in though. We still have some questions about the scrappage value along with some of these new forms we just found.

If you haven't processed a deal yet, it looks like quite a few pages of scanned document uploads and tons of deal information. We were thinking about hiring a temp to do the processing, but yours truly and our Systems Admin volunteered for the job (shoot me now).

I'm sure it will all straighten out.

Aside from dealing with Uncle Sam on this level for the first time, we've also had some memorable experiences with a few customers. Before I share any stories, Jeff and I want to hear what you all have been through. Got some funny stuff? Some frustrations? Some bragging? Let it rip!

Feel free to join our Cash for Clunkers conversation on the Dealer Refresh forums: http://forum.dealerrefresh.com/f40/cash-clunkers-224.html

Aug 6, 2009

As with most government programs, the success of the "cash for clunkers" program is not measured in how well the consequences of the program align with the stated goals of its advocates. Nor is it measured by any economic impacts the consequences might cause. Instead, just like the example of the public library in George Dance's recent article about Booze and books, the success is measured by participation or usage, not by any measure of the value provides or harm it does to our economy. The trick is to define the program specifically so that it has a known demand so the usage is high. Media spin and politics will make sure the right people hear the program was successful and beneficial. I heard a bit on NPR just today about the downstream benefits that recycling all these old cars has. Ridiculous of course, but the perception amongst the voters is far more important than the actual results and consequences. Certainly there will be follow-on programs, cash for major appliances, cash for tools, etc.

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