The White House pressured the Senate to replenish “cash for clunkers” Monday, as auto dealers across Central Florida and the rest of the nation continued to register strong sales from eager customers taking advantage of the rebate program.
Robert Gibbs, President Obama’s spokesman, said the CarAllowance Rebate System is up and running but could shut down by Friday if the Senate doesn’t act.
A victim of its own success, CARS ran out of money in its first official week of operation. The House voted to provide another $2 billion before leaving for summer break last week. But the Senate would have to approve that as well before its vacation starts this Friday.
In Central Florida, Jason Tulchinsky, general sales manager forFord of Clermont, said his dealership has done about 25 “clunker” deals since the program began and was continuing to deliver cars to customers.
It will keep on doing that at least through today, regardless of what Congress does or doesn‘t to about adding to the $1 billion in original funding, Tulchinsky said.
“Corporate told us we have at least until midnight Tuesday to log deals — that they will be covered at least through then,” he said.
Jack Starling, general manager of Starling Chevrolet-Cadillac in DeLand, said the clunker program has helped bring in customer traffic to his store.
He said it’s helping to remove a lot of older vehicles from the road and put more people into fuel-efficient cars. “I’m a big fan of that,” he said.
CARS provides consumers with $3,500 or $4,500 in incentives for trading in gas guzzlers. Government officials estimated the original funding would be enough for about 250,000 deals.
The government rebate has had a decidedly positive impact on Ford sales, helping push the company’s July 2009 sales up 2 percent from the same month a year ago, the company said Monday. It was the company’s first U.S. sales increase in nearly two years.
“We had another strong month in progress [even] before the ‘cash for clunkers’ program started,” said Ken Czubay, a Ford vice president of marketing, sales and service.
Transportation Secretary Ray LaHood ducked when asked if the program will be suspended if the Senate does not vote to replenish coffers before lawmakers go on vacation later this week. Instead, he said “I believe the Senate will pass it this week.”
The administration said the average fuel economy of new vehicles purchased through the program is nearly 10 miles per gallon higher than for the vehicles traded in for scrap.
LaHood said some 80 percent of the traded-in vehicles are pickups or sports utility vehicles, meaning many gas-guzzlers are being taken off the road, and the Ford Focus is a leading replacement vehicle.
Fierce lobbying to extend funding for CARS also came from the National Automobile Dealers Association and the American International Automobile Dealers, which contacted thousands of dealerships, telling them to bombard the Senate with phone calls and e-mails.
“This is the one true stimulus that seems to be working out of all the things that have been tried in the last few months,” said Cody Lusk, president of the international group.
Meanwhile, dealers learned that the $3,500 or $4,500 the government contributes towards the cost of a new car is taxable income for dealers, but not for consumers. Trade organizations last week were suggesting that it would not be taxable for either, but the Internal Revenue Service clarified its position.
And dealers no longer must permanently disable the engines in the “clunker” trade-ins before they apply for the CARS money but must do so within one week of receiving the funds.
This prevents dealers from essentially destroying the value of a clunker before it is learned whether funds remain available to pay for it.
