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‘Clunker’ program clocks out

The merits of the ‘cash for clunkers’ government program have been discussed and debated at length, but there’s no question the program has moved vehicles off the lot and into customers’ garages and driveways.
Officially known as the Car Allowance Rebate System, the program ended last Monday and accounted for nearly 700,000 new car purchases during its month-long lifespan, according to the U.S. Transportation Department.
‘We sold all the cars we had (that qualified),’ Jim Hodge, owner of Heritage Ford in Corydon, said. ‘It did OK; it sold a lot of units. We had a little run at the end of the month, and (August) was better than the last. The question is, will this momentum continue?’
Hodge said, overall, sales have not yet turned the corner.
As for the payment from the government, he said some transactions have been paid for but others have not. He said he has confidence that the ‘check’s in the mail.’
Addressing concern from frustrated dealership owners, Transportation Secretary Ray LaHood assured car dealers they would get their money.
Gerdon Auto Sales in Corydon did not participate in cash for clunkers, and John Jones GM City, also in Corydon, declined to comment on the program.
The government, through auto dealers, reduced the costs on new, more fuel-efficient cars or trucks by $3,500 or $4,500, depending on the miles-per-gallon performance of the trade-in.
The price reductions were made through vouchers to the dealers. The vouchers totaled $2.88 billion, just less than the $3 billion allotted by Congress.
The most popular car for purchase was the Toyota Corolla. The No. 1 ‘clunker’ traded in was the Ford Explorer.
Nearly 20 percent of the cars purchased were Toyotas. General Motors was second with 17 percent, and Ford accounted for just more than 14 percent.
Another goal of the plan was to reduce the number of ‘gas guzzling’ vehicles on the roads. On this front, the program succeeded, as the average miles per gallon of the newly-purchased vehicles was 24.9, while the traded-in clunkers averaged 15.8 mpg.
Not every customer had a good experience with the clunker program. Jo Ann Conrad of Corydon purchased a vehicle from the Kia Store of Clarksville only to learn later that she had to return the car because documentation that she was told was accepted had, in fact, not been. Although the vehicle was owned by the seller for at least the past three years, as required for the program, the clunker had not been tagged the past year, making it ineligible for the program.
After paying the upfront cost of $10,000, Conrad said the Kia Store also would have received the $4,500 from the clunker program and another $1,500 through a tax rebate if the paperwork was accepted.
‘It was really a bad deal,’ she said.
The plan began with an allotment of $1 billion and was expected to last through Nov. 1, but another $2 billion was added and the popularity of the program forced the Obama administration to end it at 8 p.m. Aug. 24.

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