Most Southern Nevada dealers say program no ‘clunker’

After being diagnosed as needing repairs and more money, the government's wildly popular "clunkers" program crept back out onto the open road Friday.

And new car salespeople in Southern Nevada expect another wave of customers if Congress allocates $2 billion to continue the program.

The House of Representatives passed a bill to do that Friday, and it now goes to the Senate. But confusion reigned as conflicting reports continued about whether the program would be shut because it had nearly burned through its entire $1 billion budget in less than a week.

President Barack Obama tried to reassure consumers. He urged the Senate to act quickly to approve the additional funding and praised Friday's 316-109 House vote.

Southern Nevada dealers have a few complaints about the Car Allowance Rebate System -- but they generally like the program.

Rich Abajian, general manager at Findlay Toyota, cited 40 vehicles that motorists traded for vouchers of $3,500 to $4,500 to use in buying new cars at his dealership. However, he wishes he could resell some of the so-called clunkers, and the government prohibits dealers from reselling the clunkers.

Abajian mentioned a 1995 four-by-four Toyota pickup "that people are really yelling for and we've got to dismantle it and get it crushed." He similarly recalled a '91 Lexus LS 430, an '01 Acura Legend and a 2000 Dodge Durango.

"There was a '99 Range Rover that was extremely nice," Abajian said. "It breaks my heart to see them destroyed. It's like poisoning your son."

Jim Marsh of the similarly named dealership for Mitsubishi, Suzuki and Kia vehicles counted six clunkers traded for new car vouchers.

"It's going to give us a shot in the arm," Marsh said.

However, he considers the program bad government policy. "I just don't think the government should get involved in private transactions," Marsh said.

Auto dealer representatives say they wish the government approval process worked smoother and fear that they may accept clunkers after government money runs out. However, most dealers are enthusiastic about the cash-for-clunkers program.

"This program, in about one week, generated almost one-quarter of a million car sales," said Wayne Frediani, executive director of the Nevada Franchised Auto Dealers Association.

"I think it's been very successful in accomplishing its goal of boosting car and truck sales," Frediani said.

The program has worked much better than other stimulus programs, he said.

"It's the first good news in the new car industry for a long time, since probably last fall," Frediani said.

Greg Heinrich, co-chairman of Chevrolet National Dealership Council and president of Fairway Chevrolet and two other area dealerships, also applauded the program.

"I think it's a good program. It gives consumers an opportunity to get a car at a good price point," Heinrich said. "I'm glad they're thinking about increasing the program. I don't think anyone expected the response would be this big. It kind of overloaded the system."

Each of Heinrich's dealerships has taken about 10 clunkers in trade since the program began a week ago.

The program attracted other customers who did not qualify.

"Anytime in a business where we can get customers in the dealership," Heinrich said, "it's a real good opportunity for us."

Tom Mac Millin, fleet and Internet sales manager for Findlay Honda, agreed: "It's brought a lot of car buyers to life." Clunker owners can do all of the transaction, except turn in their old car, over the Internet, Mac Millin said.

Allen Lee, general manager for Findlay Honda, said buyers traded 20 clunkers at the dealership over the last week.

He has noticed a gradual increase in sales recently and said the program gave new car sales another boost.

"The program has definitely started the public to start shopping for cars," Lee said. "I think the program is going to work out great."

Dealers say they are surprised that many clunker traders have strong credit ratings. Many customers trading clunkers consider cars a "tool," rather than a passion, Heinrich said.

Some dealers are sitting tight waiting for final word on new funds for the program, Frediani said, but others are proceeding full-speed ahead and urging customers to buy before federal money runs out.

Still, the program's future beyond this weekend remains a question mark.

The Obama administration promised consumers that rebate requests would be honored at least through Sunday to avoid damping enthusiasm for one the most successful economic stimulus efforts yet. But the White House did not make any commitments beyond that, and the new money to keep the program alive faces a rougher road in the Senate next week.

Senate Majority Leader Harry Reid hopes to take the bill to the floor next week, spokesman Jon Summers said in an e-mail. "As for timing, a lot of that will depend on how much cooperation we get from Republican senators," Summers said.

The House vote shifted $2 billion into the program from another stimulus project -- a $6 billion loan guarantee fund for innovative renewable energy technology. Lawmakers moved unusually quickly before leaving Friday for their August recess.

The Senate plans to vote on the additional money next week before it also leaves Washington until September. Despite the strong bipartisan House vote, passage isn't assured. Sen. John McCain, R-Ariz., has promised a filibuster, objecting along with some other fiscal conservatives to the additional government spending.

Other lawmakers have problems as well. Sens. Dianne Feinstein, D-Calif., and Susan Collins, R-Maine, said they would not support the additional money unless guidelines were toughened. They want newly purchased vehicles to get at least two miles more per gallon than the current eligibility requirements.

"It's easy to throw rocks at stuff like this," said Charles Benjamin, Nevada office director for environmental group Western Resource Advocates. "It's never going to be perfect, but we're making progress."

Benjamin suggested that Congress set less restrictive fuel standards so that the auto industry could sell vehicles already in inventory and the industry can recover.

The National Automobile Dealers Association opposes any changes.

"You have a program which is an immense success ... and you want to change it?" said spokesman Bailey Wood. "It doesn't make any sense."

He said the program was confusing enough for consumers, as well as dealers, who have had difficulty getting their complicated rebate reimbursement forms approved by the government.

Tougher fuel-efficiency standards aren't needed because evidence so far shows that consumers are opting for smaller, more fuel-efficient cars, Wood said.

The Los Angeles Times contributed to this report.