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At 'Clunkers' finish line, only red tape

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business Hastings, 55033
Hastings Minnesota 745 Spiral Boulevard 55033

The Transportation Department extended the deadline Monday for auto dealers to submit their Cash for Clunkers deals, giving them more time to make sure they get repaid under the popular $3 billion government rebate program.

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Dealers now have until noon today to submit the necessary paperwork, after the deadline was pushed back from 7 p.m. Monday. All sales under the program were still scheduled to end Monday evening.

The change came after government computers set up to handle the filings buckled under a flood of dealers trying to send in their sales agreements at the last minute.

Brad Nelson, general manager of Kia of Duluth, said he's hopeful that noon today will be enough time to process the roughly 15 deals made at his dealership Monday.

"Dealing with this program you have to be an optimist," he said. "It's kind of a tense situation because you want to hurry up and get everyone done, but you also want to make sure you're doing a good job for the customers."

Joe Plucinak at Miller Hill Subaru felt the same tension.

"I have two people here ready to process a deal, but the government's Web site has been down since 9:30,'' Plucinak said just before 3 p.m.

Word was spreading late in the afternoon that all clunker sales made by Monday's deadline would be honored and that dealer processing would be allowed into today.

Despite the last-minute logjam, several local dealers said Cash for Clunkers was worth the effort.

The program has been "beyond our wildest expectations" for Kia of Duluth, Nelson said, adding the dealership sold as many new vehicles each week of the program as they normally would in a month.

"We went into it full-bore, ordering more inventory and marketing heavily. But it really paid off for us," he said. "We are a value dealership to start, so I think it fit us better than some. ... We sent a lot of people home with new cars for less than $10,000 out of pocket."

Plucinak agreed the program worked, but said "it was a clerical nightmare.''

"It helped us sell some cars. But it was very slow. We have 60 in the pipeline and only four have been approved,'' he said.

Brent Baker, sales manager at Krenzen Auto Mall in Duluth, said his dealership stopped offering Cash for Clunkers last week to make sure no one was caught without a check from the government.

"We wanted to make sure we got everyone's paperwork in before it ended. We didn't want to go down to the last minute," Baker said.

Baker said the paperwork involved made the program a headache for dealerships "but it worked to sell some cars, no doubt. The reimbursement part was an issue, though," he said.

Baker said business has remained brisk even after Krenzen stopped offering the government program, noting several manufacturers' rebate and incentive programs remain in place.

Nelson said he expects a little hangover after Cash for Clunkers with slower sales for a few days.

"It will be like when we have a big off-site sale. We'll catch our breath for a while, but then it will bounce back," he said. "I think the program really helped show people's attitudes have changed. I think now, if people can get a deal, they are willing to buy. ... We didn't see that last October, November, December when people just wouldn't buy."

Nationally, some car dealers watched their lots grow nearly empty over the weekend as crowds rushed to trade in gas guzzlers after the government said the $3 billion rebate program would end Monday, two weeks earlier than expected.

U.S. Transportation Secretary Ray LaHood, speaking to reporters in Norristown, Pa., called the program an unprecedented success and a boon for car dealers, automakers, scrap yards and financial institutions.

"Once the program ends at 8 o'clock [Monday, Eastern Time], there will be 700,000 to 800,000 cars that have been sold, most of them fuel efficient," replacing gas-guzzling cars and trucks, LaHood said.

Transportation officials said that, through early Monday, dealers had submitted 625,000 vouchers totaling $2.58 billion and expected to work up to the deadline to submit the proper paperwork.

Though short of some new models, such as the Ford Focus, Honda Civic, Toyota Corolla and Nissan Altima, many dealers still were selling as many cars as they could before Monday night's deadline.

Customers received rebates of between $3,500 and $4,500, depending on the improvement in fuel efficiency from their old vehicle to their new one.

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