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Local new car dealers got big boost from Cash for Clunkers
Stories by PETER JOHNSON Tribune Staff Writer • October 11, 2009
Great Falls new car dealers say they thrived during a giddy August of crowded show rooms as potential buyers sought Cash for Clunkers program incentives.
And, for the most part, they say they avoided the debilitating hangover that many dealers experienced nationally when the federal program ran out of cash.
"We did very well in late July and August, with business spiking not only for new cars, but also for used vehicles once customers got on the lot," said David Krebs, general sales manager of Bennett Motors. "Our business had been down for about 12 months, causing pent-up demand, and the Cash for Clunkers program helped break the dam."
Bennett sold 25 new vehicles under the federal program, which provided buyers cash incentives to trade used vehicles for more fuel-efficient new models, he said, and plenty of other new and used cars, too. Sales were good for both Subaru and General Motors models, he said.
But new car sales were down about half in September, because the inventory was trimmed so much, Krebs said. Used car sales were higher.
"Thank God for October, when we'll be getting more new cars," Krebs said.
General Motors hired back 30,000 workers to make vehicles at reopened plants in the middle of Cash for Clunkers, he said. Krebs said Bennett normally has 50 new Subarus on the lot, but was down to just six last week before receiving new car shipments.
The Cash for Clunkers program spurred boom sales in the auto industry nationally from the last week of July through August, with nearly 700,000 consumers swapping eligible older vehicles for new cars and getting up to $4,500 lopped off the cost.
Great Falls used car dealers benefitted, too
October 11, 2009
The popular Cash for Clunkers program was designed to give U.S. consumers an incentive to buy new cars. But Great Falls used car dealers say the program helped them some, too, by kindling interest.
However, they say that by destroying nearly 700,000 trade-in "clunkers," the program might well create a shortage in older, second vehicles.
"I think Cash for Clunkers did create more focus in consumers' minds on the value of new vehicles," said Jim Taylor Jr. of Taylor's Automax, 4100 10th St. S. "But it had the reciprocal effect of spurring people to think of buying cars again in general."
"We noticed quite a few more people on our lot in August and experienced a slight increase in sales during that period," he said.
Taylor's did not have a drop in sales in September, after money ran out for the federal program.
"Our niche is late model, high-quality, low-mileage pre-owned cars and trucks priced considerably less than new vehicles," he said.
"And our inventory remains strong. We're prepared for the fall with plenty of trucks and SUVs for hunting and winter driving."
New car dealers may be experiencing "a hangover" from the government incentives that spurred some folks to buy cars earlier than planned, Taylor said.
There also could be a shortage of lower-end, used vehicles that serve as basic transportation for lower income people and second family cars for teen drivers, he said. That's because some 700,000 cars traded in during the federal program were taken off the market and crushed.
Still, Taylor believes Cash for Clunkers was a good idea.
"Anything that creates consumer interest during a recession in buying cars is good for everybody connected to the auto industry," he said. "Locally, all car dealers were feeling a modest slump."
Used car sales also picked up in August and September at Pete's Auto Sales locations at 3456 10th Ave. S. and 3845 10th Ave. S., said sales manager Terry Douglass.
"We exceeded sales numbers from previous years in both months," he said. "The federal government did a lot of promotion for new car sales with Cash for Clunkers and we in effect piggy-backed it."