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'Cash for clunkers' keeps dealers busy

Would-be buyers race in as reports surface that the federal rebate program is running out of money. The Obama administration is keeping it going at least through the weekend.

August 01, 2009|Andrea Chang and Tiffany Hsu

Anxious buyers were rolling into Southern California car dealerships Friday, eager to snag a cash-for-clunkers deal while they still had the chance.

And some dealers said they were girding for a hellish weekend with a lucrative twist.

At Galpin Ford in North Hills, where huge banners promised "Big ca$h for your clunker," the showroom was packed with people.

"I've never worked so hard," said Galpin salesman Brian Fraleigh, who said he worked selling cars until 3:30 a.m. Friday and was back at his post before noon.

Car dealers said they have seen a healthy increase in customers all week, but things took off Thursday night when reports surfaced that the program was running out of money.

At Scott Robinson Honda in Torrance, Thursday night was a madhouse. Customers jammed the dealership and sales manager Aaron Bell stayed until 1:45 a.m. processing the 26 cash-for-clunkers deals.

Customers waited nearly two hours each for their turn, ordering takeout dinners and arranging for others to pick up their children.

"We were understaffed and didn't know we'd have a rush until it hit," Bell said. "Yesterday was a huge day. It was a salesperson's dream."

As news filtered out during the day that the program would stay in business at least through Sunday, Bell said the dealership would have to brace itself for more busy nights. Business was already picking up Friday afternoon.

"Customers felt like they missed out on the deals for the first $1 billion, but now the people who were seriously considering the program are going to come down sooner rather than later," he said. "This infusion will definitely drive more traffic."

Early Friday, managers at Glendale Dodge put the brakes on making any more clunker deals for fear the dealership wouldn't be reimbursed by Washington for the thousands of dollars in rebates they were giving customers.

They got back in the game, though, after the Obama administration pledged to keep the program running at least through the weekend. The House OKd $2 billion more in funding Friday, but there was no guarantee the Senate would go along next week.

The federal program, launched July 24, provides rebates of $3,500 or $4,500 to consumers who trade in vehicles with combined city/highway mileage of 18 miles per gallon or less and buy more fuel-efficient new cars or trucks.

The program was designed to run until Nov. 1 or until its $1-billion budget ran out, whichever came first. But government officials say the program is already running out of money because of the overwhelming consumer response.

For Terese Crow of Van Nuys, it was a chance to get rid of a lawn ornament -- her son's 1990 Chevy Silverado pickup, which he'd spray-painted red to "even out" the paint job.

"I said, 'Get rid of that sucker. No one is going to give you $4,500 for it,' " she said while waiting at Galpin. "It's ugly, it's old. It's part of the family so I'm sad to get rid of it, but not that sad."

Automakers, struggling with the worst market in decades, hope the federal program generates some non-clunker deals -- and there is some evidence that it's happening.

Bell said about 15 customers had brought in nonqualifying clunkers since July 27, but about a third of them ended up buying a new car anyway.

One problem that has contributed to the drop in car sales over the last year -- tight credit -- is still an issue with the clunkers program.

At Felix Chevrolet near USC, general manager Kenneth Kang said that only three of the 15 customers who brought in trade-ins Thursday night that qualified for the program had acceptable credit.

Galpin salesman Fraleigh, meanwhile, was just happy to see some excitement return to the showroom. "Last night it was mass chaos," he said. "I'll tell you what, though -- it's nice to be busy again."

--

andrea.chang@latimes.com

tiffany.hsu@latimes.com

Times staff writer Martin Zimmerman contributed to this report.

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