Cash for Clunkers Results Mixed

The Car Allowance Rebate System, better known as Cash for Clunkers, ended on Monday, Aug. 24, with mixed results at Summit’s car dealerships on Morris Avenue.

While nearly $2.87 billion worth of rebate applications were submitted nationwide by the Monday night deadline, some high-end dealers like Smythe Volvo and Douglas Infiniti experienced little reaction from potential buyers, while Douglas Volkswagen Buick Pontiac GMC seemingly profited from the government’s efforts.

Craig Melquist, the sales manager at Smythe Volvo, only sold one car because of the CARS program–a customer from Berkeley Heights traded in an older Jeep for a convertible.

He said he suspects it was because many people did not want to trade their larger trucks for smaller, more fuel-efficient cars–one of the goals of the government program. He also thinks that while the program was good in theory, it wasn’t implemented well.

“The actual program started on July 1, but they didn’t announce the particulars of the program until July 27,” he said, citing that many people didn’t know about the rebates or if their older cars qualified until recently.

Melquist was also concerned that the dealerships weren’t able to make any money off of the clunkers themselves, which were taken by junkyards to be crushed after some parts were removed, according to the CARS Web site.

Robert DelVirginia, the director of new and used car sales at Douglas Infiniti, didn’t sell any cars associated with Cash for Clunkers because there was only one car that qualified for the trade-in, and it was for lease only.

“No one would trade an old car for a lease,” he said. “But I do know dealerships that sold a lot of cars.”

The top 10 new cars purchased, according to the government site, did not include any Volvos or Infinitis. Instead the Toyota Corrolla took the top spot, followed by several Honda and Ford models. The Nissan Versa and the Hyundai Elantra were also included.

While Melquist and DelVirginia did not see any success with the program, Kurt Steger of Douglas Volkswagen Buick Pontiac GMC was able to sell roughly 40 cars because of the rebate system. Of those, 25 to 30 percent of his customers were from Summit. This particular dealership had many more cars that were eligible for the rebate compared to the others.

“About 75 percent (of the inventory) qualified for Cash for Clunkers,” he said.

Customers mostly traded in gas guzzling SUVs for the Volkswagen Jetta TDI, a smaller car run on diesel fuel, Steger said.

While many dealerships that feature more expensive cars didn’t make much of a profit from the program, Steger would undoubtedly participate again.

“It was definitely a profitable program for us,” he said. “It caused a real stir in the industry. Even those who didn’t qualify thought about buying a new car.”

While more people seemed to be interested in trading in their clunkers at a dealership with more options, even Melquist said that the program was good for the industry.

"It generated buzz to get people looking at cars again,” he said.