Clunker program’s uncertain fate encourages many to act fast

Published 12:01 am Saturday, August 1, 2009

EVERETT — Mark Kuter didn’t want to roll the dice on Congress.

As politicians on Friday debated the merits of pumping more money into the “cash for clunkers” car purchase program, the Bothell mechanic figured it was time to take advantage of the wildly popular incentive.

He drove his 1989 Ford F250 pickup truck to Harris Ford in Lynnwood and drove off in a gray 2009 Ford Ranger.

The blue book said his cherished old truck, which increasingly needed maintenance, was worth $1,000; he felt the $4,500 offered him under the federal program was more in line with its real value.

“It’s just the logical thing to do,” he said. “I’m a happy guy. I have been wanting a new truck for about a year. This just was the right incentive to go out and get it.”

Kuter joined tens of thousands of others nationwide who’ve traded in beloved vehicles with large appetites for fuel for brand new wheels getting many more miles per gallon.

Under the Car Allowance Rebate System, owners who make such an exchange can earn a federal rebate on a new car of up to $4,500.

So many qualified and consummated deals in the program’s first week that the $1 billion in taxpayer money provided for rebates had been nearly all spoken for by late Thursday. This prompted concern at the U.S. Department of Transportation and talk of suspending the program.

On Friday, the House of Representatives in uncharacteristically speedy fashion passed legislation to give it another $2 billion.

It passed on 316-109 vote. The Senate will consider that bill or its own version next week. In the meantime, White House officials said Friday any deals made this weekend will be honored.

“There was skepticism about this program. I think there was a lot of surprise about how successful it has been,” said Rep. Rick Larsen, D-Wash., who supported the infusion of money.

He said it’s meeting the two goals set out by Congress: providing a jolt to the economy through increased car sales and a boost to the environment by replacing gas guzzlers with higher-mileage vehicles.

Between Thursday’s flurry of rumors of its halt and Friday’s House vote, shoppers frantic to not miss out on the program rushed to dealerships.

Doors closed at 9 p.m. Thursday at Dwayne Lane Chrysler-Jeep-Dodge-Suzuki in South Everett, but the last customer didn’t leave until a little before 2 a.m. Friday, said owner-president Tom Lane.

“It was a bit of a circus,” he said.

He’s gratified at the rise in business, although it’s been difficult to maneuver through the federal system to get deals approved.

“They underestimated demand of consumers and the dealers who want to get into it,” he said.

That initial $1 billion investment was expected to cover about 250,000 car sales. Lane said he’s recorded two dozen. Multiply that by the 23,000 dealers nationwide and it’s easy to see why federal leaders feared the program would run out of money.

Bryan Kelley, a sales manager at Harris Ford, is excited Congress is replenishing the program’s pot of money. He too had seen a surge in customer interest even before Thursday’s commotion.

There have been about 30 more customers and four more sales a day for the Lynnwood business, he said.

Most buyers know how the program works. Still, some did try to trade two and in one case three clunkers for a new car, he said. The law allows only one rebate per household and is only good for trading one old car for one new one.

One group not benefitting from the federal incentive program are used car lots.

Cameron Westlund is trying to change that.

The owner of the used car lot Checkered Flag Motors on Broadway in Everett changed his reader board sign to say “Clunkers for Cash $$ No Limit.”

His inventory is mostly made up of cars selling for less than $4,500.

“Every new car dealer is advertising cash for clunkers, “ Westlund said. “We sell cars that are under $4,500 bucks, so we’re playing on everybody else’s advertising.”

Firms recycling clunkers are waiting to see if their businesses will pick up.

As of Friday morning only three cars had been brought to Pull-A-Part yards in Arlington, Lynnwood and Lakewood, said Bruce Thomson, support manager for company.

“I have heard there are lots and lots of cars taken in,” he said. “From our end, we hope the cars come.”

Like Kuter’s truck.

He was a little sad to hand the keys to the 20-year-old pickup over to the dealership. Before buying his fifth Ford truck — and first new one — he was allowed to remove the new stereo and tires from his trade-in.

“It has been a good truck,” he said.” It’s really hard. They are just going to just turn it into a big crinkled ball.”

Reporter David Chircop contributed to this story. Reporter Jerry Cornfield: 360-352-8623; jcornfield@heraldnet.com.

FYI

For information on the program, go to www.cars.gov

Cash For Cars

The U.S. House of Representatives on Friday voted 316-109 to add $2 billion into the Cash for Clunkers program. Here’s how members of Washington’s delegation voted.

For

Democrats: Jay Inslee, Rick Larsen, Jim McDermott, Adam Smith, Norm Dicks

Republicans: Dave Reichert

Against

Democrats: Brian Baird

Republicans: Doc Hastings, Cathy McMorris-Rodgers

Source: Clerk of the House of Representatives