MONROE - The federal government's "cash for clunkers" program has helped local auto dealerships over the past few weeks, but as of Monday night, the sales figures for those dealers could become difficult to sustain.
The clunkers program ended at 7 p.m., which also was the deadline for dealers to get their paperwork submitted to the federal government's Web site in order for the business owners to be refunded the $3,500 or $4,500 rebate cost they had to pay for each automobile sold under the program.
"It's a slow, painful process to get this stuff processed and submitted," said Chad Manor, general manager of Alphorn Ford-Lincoln-Mercury, Monroe.
The federal government had to add extra staff to process dealership submissions, said Bill Ruda, owner of Ruda Chevrolet-Toyota, Monroe. In the beginning of the program, the site even would crash due to volume.
Despite the online headaches and the painstaking paperwork, the program has succeeded, but the future is uncertain, Ruda said.
"I think it has helped everybody, but the question is what happens next month?" he said.
Ruda fronted about $175,000 to cover the cost of the clunker rebates, Ruda said.
The program allows vehicle owners with inefficient vehicles to trade them in for more fuel-efficient automobiles and receive up to a $4,500 rebate.
Even considering the risk in banking on the government money, the program benefited Ruda as well as Alphorn.
Alphorn sold 25 vehicles as part of the program, fewer than Ruda's 45 to 50 vehicles, but a success nonetheless, according to Manor.
"Absolutely," he said.
Manor is not worried about a potential dropoff in sales during the slower fall selling season now that the government-backed rebate has disappeared, because of the amount of outreach to current customers performed by the dealership.
Alphorn sends out thank-you cards and call customers to help foster referrals and repeat sales, he said.
"Once we get them in, it's like water in a garden; we try to take care of out customers," he said.
However, Manor conceded there is inherent risk in banking on using the government to recoup upfront costs.
"There is potential for disaster here if the government doesn't distribute the funds," he said.
Neither Ruda nor Alphorn needed to take the step of securing a private loan to cover their costs until the government could reimburse them.
The 12-page form each dealership has to fill out must be transferred to the government's Web site, then each dealer must wait for approval and finally, payment, Ruda said.
Each form can take an hour to complete, Manor said.
A late rush of customers Friday and Saturday kept Ruda's wife and a sales employee working until midnight Saturday filing clunkers claims online, Ruda said.
"If we don't (file claims) we don't get paid," he said.
Even if claims are filed on time, dealers still must wait a while for reimbursement, Ruda said. In fact, his dealership has only been paid for a couple of vehicles.
Despite all of the work and waiting involved, the program has been a hit with consumers and dealers, as well as the economy, both Ruda and Manor said, given that industry sales were down about 35 percent prior to the program.
Under the program, beyond the individual sales, General Motors and Chrysler, fresh off government-led bankruptcies, have boosted production, along with Toyota, Ford and others. General Motors is rehiring more than 1,300 laid-off workers, Hyundai is bringing 3,000 workers back to an Alabama plant, and automakers are paying workers overtime to meet the demand.
Many auto analysts question whether clunkers will have a lasting impact, robbing sales from the final months of 2009 and 2010. A slight auto industry recovery in July and August could be offset by declining sales in September and October and wipe away the bump in consumer confidence.
"We've got inventories tight, prices going up, incentive activity dropping, new cars coming out in October at even higher prices," said Jeremy Anwyl, CEO of the auto Web site Edmunds.com. "There's not going to be much momentum that's going to drive sales to the levels that we've seen."
- The Associated Press contributed to this article.
The clunkers program ended at 7 p.m., which also was the deadline for dealers to get their paperwork submitted to the federal government's Web site in order for the business owners to be refunded the $3,500 or $4,500 rebate cost they had to pay for each automobile sold under the program.
"It's a slow, painful process to get this stuff processed and submitted," said Chad Manor, general manager of Alphorn Ford-Lincoln-Mercury, Monroe.
The federal government had to add extra staff to process dealership submissions, said Bill Ruda, owner of Ruda Chevrolet-Toyota, Monroe. In the beginning of the program, the site even would crash due to volume.
Despite the online headaches and the painstaking paperwork, the program has succeeded, but the future is uncertain, Ruda said.
"I think it has helped everybody, but the question is what happens next month?" he said.
Ruda fronted about $175,000 to cover the cost of the clunker rebates, Ruda said.
The program allows vehicle owners with inefficient vehicles to trade them in for more fuel-efficient automobiles and receive up to a $4,500 rebate.
Even considering the risk in banking on the government money, the program benefited Ruda as well as Alphorn.
Alphorn sold 25 vehicles as part of the program, fewer than Ruda's 45 to 50 vehicles, but a success nonetheless, according to Manor.
"Absolutely," he said.
Manor is not worried about a potential dropoff in sales during the slower fall selling season now that the government-backed rebate has disappeared, because of the amount of outreach to current customers performed by the dealership.
Alphorn sends out thank-you cards and call customers to help foster referrals and repeat sales, he said.
"Once we get them in, it's like water in a garden; we try to take care of out customers," he said.
However, Manor conceded there is inherent risk in banking on using the government to recoup upfront costs.
"There is potential for disaster here if the government doesn't distribute the funds," he said.
Neither Ruda nor Alphorn needed to take the step of securing a private loan to cover their costs until the government could reimburse them.
The 12-page form each dealership has to fill out must be transferred to the government's Web site, then each dealer must wait for approval and finally, payment, Ruda said.
Each form can take an hour to complete, Manor said.
A late rush of customers Friday and Saturday kept Ruda's wife and a sales employee working until midnight Saturday filing clunkers claims online, Ruda said.
"If we don't (file claims) we don't get paid," he said.
Even if claims are filed on time, dealers still must wait a while for reimbursement, Ruda said. In fact, his dealership has only been paid for a couple of vehicles.
Despite all of the work and waiting involved, the program has been a hit with consumers and dealers, as well as the economy, both Ruda and Manor said, given that industry sales were down about 35 percent prior to the program.
Under the program, beyond the individual sales, General Motors and Chrysler, fresh off government-led bankruptcies, have boosted production, along with Toyota, Ford and others. General Motors is rehiring more than 1,300 laid-off workers, Hyundai is bringing 3,000 workers back to an Alabama plant, and automakers are paying workers overtime to meet the demand.
Many auto analysts question whether clunkers will have a lasting impact, robbing sales from the final months of 2009 and 2010. A slight auto industry recovery in July and August could be offset by declining sales in September and October and wipe away the bump in consumer confidence.
"We've got inventories tight, prices going up, incentive activity dropping, new cars coming out in October at even higher prices," said Jeremy Anwyl, CEO of the auto Web site Edmunds.com. "There's not going to be much momentum that's going to drive sales to the levels that we've seen."
- The Associated Press contributed to this article.