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Published: Aug 04, 2009 10:45 AM
Modified: Aug 11, 2009 10:19 AM

Cash brings out clunkers
Jack Dear gets ready to haul two “clunkers” from Classic Ford in Smithfield to Wayne Auto Salvage in Goldsboro.

 
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SMITHFIELD — The McLambs hadn’t planned to buy a new car — not for a few years anyway.

But with help from the federal “cash for clunkers” program, which offers up to $4,500 toward new-car purchases, they drove a new Ford Ranger off the lot last Friday.

“I kind of needed a new truck anyway,” said Parson McLamb. “This extra money made my decision a lot easier.”

The couple traded in their “well-worn” 2001 Dodge Ram pickup and picked up a new Ranger, which sells for between $15,000 and $24,000, according to U.S. News and World Report. They got the full $4,500 discount from the Car Allowance Rebate System, which requires that customers trade in a car with poor gas mileage and buy a new, more-efficient vehicle.

“It helps the consumer out and the dealership,” said Toni McLamb, an elementary school teacher. With Parson out of work and attending Johnston Community College, the couple had planned to drive their Ram into the ground before replacing it. “We would have just made do,” Toni said.

In most cases, trade-ins get just $500 to $1,500, said Bruce Reaves, general sales manager at Classic Ford Lincoln Mercury in Smithfield, where the McLambs bought their new truck.

“It’s been huge, man,” Reaves said. “The cash for clunkers definitely gave us a shot in the arm.”

He said the program, which kicked off July 24, boosted sales by 20 percent last week. A typical sales promotion might bring in 5-percent more.

The sales surge is good news for new-car dealers. Nationwide, car sales in June were down 30.4 percent and light trucks were down 24.3 percent compared to June 2008, according to figures from The Wall Street Journal.

To see if their clunker qualifies for cash, owners can visit fueleconomy.gov or cars.gov. Once a clunker is traded in, the dealer must destroy the car’s engine to ensure it isn’t sold back into the market. At Classic Ford, a mechanic runs sodium silicate — or liquid glass — into the engine before the car is hauled off to be scrapped. Kinks in the system The program seems to have its kinks, though. First, it blew through its $1 billion budget in just a week. The U.S. House of Representatives rushed through an extra $2 billion Friday morning to keep the rebates flowing.

Some dealerships have also complained of a purchase-reporting system that is confusing and often broken. After a customer buys a car, the dealership files the purchase with the government in order to get the money for the discount it issued.

Reaves said his office had tried to file for the discounts all week with little success. “It’s unreal; it kicks you out of the computer system,” he said. “How do I get my money? I don’t know.”

Others have complained that while the program helps new-car buyers and sellers, it drives down the availability of used cars.

“That used car is gone out of the market for the guy that needs that car, and the parts are gone for the guy that needs it,” said Dale Bevell, president of Wayne Auto Salvage in Goldsboro and president of Carolina Auto Recyclers.

He said that with the engines destroyed, the cars are worth no more than scrap and that his salvage yard even lost money on some. Bevell also said swapping old cars for new might not be as eco-friendly as it seems.

“The carbon footprint’s just unbelievable to make a new car,” he said. “There’s a whole ’nother school of thought about this.”

andy.kenney@nando.com or (919) 836-5758
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