For Flathead Valley resident Lynn Norby, Cash for Clunkers could not have come at a better time. Her family’s 1996 Dodge Caravan was beginning to cost them more than it was worth, and the government-sponsored program gave them just enough of a reason to head to the dealership for a trade in.
“When this opportunity came, I figured I’d never have this good of an opportunity again,” Norby said.
But other valley residents will also have a chance to cash in, after the U.S. Senate approved a $2 billion extension for the popular auto incentive program, officially the Car Allowance Rebate System (C.A.R.S.) bill, on Friday.
While critics of the program refute it as the government throwing free money at consumers who would be buying new cars anyway, Don Kaltschmidt, owner of Don K Chevrolet in Whitefish, said Clunkers has brought in customers who would not have otherwise been in the market for purchasing a new vehicle.
“The economy is tough, and people are reluctant to go out and buy a new vehicle, a house, or any big-ticket item,” he said. “It’s been a very successful program getting people back into the market and showrooms.”
Norby did admit that she was keeping an eye out for good deals when her old Caravan began to “nickel and dime” her and her husband, but hearing about Cash for Clunkers got her into the dealership sooner.
Under the program, car owners receive vouchers of $3,500 to $4,500 when they trade in their older, less fuel-efficient vehicles for newer ones. The rules require that a trade-in vehicle must be less than 25 years old, get a combined city and highway fuel economy rating of 18 miles per gallon or less, and the new vehicle cannot cost more than $45,000.
Area dealerships are using the Cash for Clunkers program to drive more traffic into their showrooms and then combining the government vouchers with other financial incentives.
Norby received $3,500 off of her new 2009 Dodge Caravan, as well as other discounts from Kari Dodge in Kalispell. The van normally would have set her back $32,000, but only cost her $21,500.
“People are saving $8 and $9,000,” Mike Sullivan, new and used car manager at Kari Dodge, said. “It’s big, and I think people who actually understand the program are the ones out there doing it. Across the board at all the stores, everybody is pretty much getting clobbered.”
At Scarff Auto Center in Kalispell, owner Greg Scarff said most customers have qualified for the full $4,500 under the Cash for Clunkers program. When combined with factory incentives, some have gotten as much as 50 percent off of their new vehicle trade-in.
Along with offering customers big savings and getting people back into the showrooms, Scarff said the program has a positive effect on the environment.
“It’s definitely getting clunkers off the road, there’s no doubt about that,” he said. “It’s getting people into more fuel-efficient, cleaner-burning fuel (vehicles).”
Montana Congressman Denny Rehberg hailed the Cash for Clunkers program as aiding economic recovery in a way the stimulus has not been, referring to it as timely, targeted, temporary and transparent.
“Cash for Clunkers works because it puts money directly into the pockets of the consumer allowing them to make choices in the marketplace,” Rehberg said in a statement released following his vote to extend funding to the program.
Despite Cash for Clunkers’ widespread popularity, Arizona Republican Sen. John McCain expressed strong opposition to the extension of the C.A.R.S. bill, citing its unnecessary cost to taxpayers during a down economy and a bailout for automobile corporations.
Dealerships don’t deny the program has increased their sales.
“There’s no question with the car industry – it’s driving traffic to the dealership and giving the consumer a way to purchase a vehicle,” Sullivan said. “It’s caused a rippling effect in the auto industry, tire, service, accessory – everybody connected in the industry. The ripple effect goes on and on and on.”