'Clunkers' interest remains strong as program rules relaxed

Consumers may find it a little easier to find cars to buy under the government's “Cash for Clunkers” program because of a change in program rules last week.

Vehicles meeting the fuel economy standards for the program have become increasingly scarce as many dealers sold out of them only three weeks into the program.

The U.S. Department of Transportation, which administers the program, had essentially limited dealers to selling only cars that were on dealer lots. Some dealers were willing to trade vehicles with other dealers in order to supply a certain model the customer wanted, but with qualifying models ever scarcer, even trades were getting harder to achieve.

“What the government recognized was, that they had increased the amount of funding for the program from $1 billion to $3 billion, but it wasn't going to help people interested in the program because there weren't enough vehicles,” said Mark Zimmerman of Mark Zimmerman Ford Hyundai Mitsubishi BMW in Cedar Rapids.

Under the new regulations, dealers can order any qualifying new vehicle the manufacturer has in inventory, as long as it has a vehicle identification number assigned to it.

“Consumers will have a much wider choice of what to buy,” said Zimmerman, whose inventory was down to about 30 from 125. He expects to get another 80 vehicles next week.

Dave Wright, with the Jim Miller Nissan Subaru dealership in Cedar Rapids, agreed the new regulations are going to help.

“It's not quite what it sounds like,” he added. “There are no VIN numbers on new vehicles usually for several weeks. But on the bright side, I'm completely out of inventory, and I have a number of cars coming in September that I have VIN numbers for. That'll take the pressure off.”

Not all dealers were struggling with inventory problems.

Randy Kuehl Honda in Cedar Rapids has been well stocked because Honda Motor Co. did not slash production and inventories as much as other car manufacturers, said Nate Kuehl, a manager.

Getting paid by the government is the next challenge for many participating dealers.

Miller said he's sold roughly 65 to 70 vehicles through the program and hasn't received any reimbursement from the government.

The National Auto Dealers Association had a meeting with federal transportation officials last week with administration officials about slow payments and other problems. The DOT acknowledged it was slow in processing reimbursement requests and pledged to add staff.

Wright said the government could also go a little easier on its paperwork requirements, which are considerable. He said the government rejected about a dozen reimbursement requests from Jim Miller Nissan simply because the word “junk” was only written on one side of the copy of the title for the vehicle traded in under the program, instead of on both sides.

Area dealers say the number of customers interested in trading in clunkers has slowed a little since the first two weeks, but remains fairly strong.