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AUTOS

'Cash for clunkers' program still powering sales

Car buyers flock to local dealerships to get the rebate, but traffic slows after last week's frenzy.

August 10, 2009|Richard Verrier

Car buyers throttled back from the mad dash last week, but sales were still brisk over the weekend as the "cash for clunkers" program continued to attract crowds to Southern California dealerships.

The Senate on Friday voted to pump an additional $2 billion into the popular auto rebate program, which should be enough to extend it through Labor Day. As expected, that slowed traffic somewhat to dealerships after last week's frenzy, when consumers rushed to car lots fearing that the program would run out of money.

Although car sales didn't double like the weekend before, they were still 25% to 50% higher than usual at many dealers in Los Angeles County -- a surge attributed to the clunkers rebate.

"We're still extremely busy," said Don Rohde, sales manager at Galpin Ford in North Hills. "I don't have enough salesmen to handle the demand."

The dealership sold 70 new cars over the weekend. That's down from 115 the week before but 50% higher than in recent months, Rohde said. He attributed 80% to 90% of the new-car sales to clunker trade-ins.

"The program has been fantastic for us," said Sammy Kobeissi, sales manager at Power Ford in Valencia. "It's not quite at last week's level, but it's still carrying over. There are a lot of people coming in."

The clunkers program, which began July 24, gives car buyers a $3,500 or $4,500 rebate when they trade in gas guzzlers for more fuel-efficient vehicles.

So far, more than 220,000 vehicles have been sold through the program, giving a welcome boost to the struggling auto industry. The industry sold cars and light trucks at an annual pace of 11.2 million units in July, the highest level in 10 months, according to sales tracker Autodata Corp.

By early Sunday morning, Kobeissi said the Ford dealership had sold 18 new cars, compared with 30 the previous weekend. Nonetheless, he said, the clunker trade-ins accounted for almost half of the weekend's new car sales.

Santa Clarita resident Andre Nogueira said the prospect of a $4,500 rebate was enough to persuade him to pay a visit to Power Ford, where he was considering trading in his wife's "clunker" -- a 2000 Infiniti with 190,000 miles on it -- for a $27,000 Ford Fusion hybrid.

"I was in the market, but this pushed me over the edge," the 33-year-old stagehand said. "It's a pretty good deal."

Across the street at Frontier Toyota, Teresa Webber of Stevenson Ranch was about to trade in her 2000 Ford Explorer for a new Toyota RAV4.

"We were going to buy a car in the next six months, but we just weren't ready to spend the money," Webber said. "This was an incentive for us."

Despite the tedious paperwork and the fact that the government has yet to pay out the rebate money, David O'Brien, general sales manager at Frontier Toyota, says the program is working.

"It's done what they put it out there to do," he said. "It's getting people to trade in their clunkers in record fashion."

Still, the upswing in sales has forced many dealerships to confront a problem they couldn't have anticipated just a few months ago: how to keep up with demand.

Dealerships nationwide have reported shortages of some popular vehicles such as the Toyota Prius, Dodge Caliber and Ford Focus.

At Galpin, Rohde said he had only three Ford Ranger trucks and half a dozen Focus sedans on the lot. He's expecting deliveries next week.

"It's kind of a good problem to have," he said.

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richard.verrier@latimes.com

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