Mike Coffman at Diers Ford-Lincoln-Mercury in Fremont, Neb., has about 30 cars tagged with “sold'' stickers.
83 percent of the trade-ins have been trucks or SUVs
60 percent of the new purchases have been cars
Kevin Brennan of Edwards Subaru-Hyundai in Council Bluffs has about 70 sales pending.
Tom Fitzgerald at Kia of Omaha has 75 sales pending.
“Focus, Fusion and Escapes on the Ford side and Mercury's Mariner and Milan are all best-sellers,'' said Coffman, a Diers salesman who was paged once and whose cell phone rang three times during a five-minute period Monday.
“I've been here 21 years and haven't seen anything like it,'' he said. “It's been extremely busy.''
Sales of more fuel-efficient new cars and trucks are booming at dealerships across the country as buyers come into showrooms under the federal government's “cash for clunkers” program.
Ford Motor Co. reported its first U.S. sales increase in nearly two years. Other major automakers were expected to turn in strong performances thanks to the burst of demand created by clunkers transactions. South Korea's Hyundai Motor Co. may pass Chrysler and Japan's Nissan in sales for the first time in history.
But the sales gains aren't without confusion and frustration.
None of the 175 pending sales noted by Coffman, Brennan and Fitzgerald had cleared the National Highway Traffic Safety Commission, which is administering the program, as of Monday afternoon.
“We're just gaining momentum, and we need to know if the government is going to continue the program or stop it. Confusion doesn't help anyone,'' said Brennan, new-vehicle director at Edwards Subaru-Hyundai.
The Obama administration appealed Monday to the Senate to replenish the $1 billion clunkers rebate program with $2 billion more this week. The program has faced criticism in the Senate about its cost and environmental effectiveness. The administration said during the weekend that the program could expire this week unless the Senate acts. The House voted overwhelmingly for the extra money on Friday.
Transportation Secretary Ray LaHood expects the Senate to extend the program. He said any clunkers deal in the pipeline will be honored. The U.S. Transportation Department is doubling the number of contract workers to process clunkers transactions in an attempt to clear a backlog of applications that has grown to hundreds of thousands.
The program, which provides consumers with $3,500 or $4,500 in incentives for trading in gas guzzlers for more fuel-efficient vehicles, drove a surge of shoppers into dealerships over the past week, stunning automakers and dealers and overwhelming the program's Web site.
Coffman said the program is choking on paperwork, despite its online process.
“All the i's need to be dotted and the t's crossed,'' he said.
Coffman said the government will stall or reject an application if, for example, a buyer's driver's license lists him as Mike Smith and his car title is registered to Mike Smith, but his auto insurance covers “Michael” Smith.
“We run into foolish things like that, and we can't talk to anyone to correct it,” Coffman said. “The Web site to correct it is down most of the time.''
The program is designed to get old, polluting vehicles off the road and scrapped while helping car dealers emerge from the recession. The $1 billion has led to the sale of some 250,000 new vehicles.
Coffman said many buyers are settling for their second, third or fourth choice of a new vehicle because showroom inventories are shrinking.
“People may have a clunker worth only $1,000, but if it fits the bill, they'll try hard to use that clunker to get $3,500 or $4,500 off a new vehicle,'' he said. “Most are looking for more fuel-efficient vehicles and they'll attempt to buy what meets their needs, but they always won't get their first choice.''
The administration said the average fuel economy of new vehicles purchased through the program is nearly 10 miles per gallon higher than for the vehicles traded in for scrap. LaHood said some 80 percent of the trade-ins are pickups or sport utility vehicles. The Ford Focus is a leading replacement vehicle.
Fitzgerald, general manager of Kia of Omaha, said the clunkers campaign is a winner for both consumers and dealerships, despite online delays in finalizing deals.
Fitzgerald said his salesmen have been successful in most cases in fulfilling buyers' requests for certain models, colors and features by finding vehicles at other area Kia dealers.
“It's definitely a lot of fun to help folks,'' he said.
Coffman said demand is so great that it wouldn't surprise him to learn that the extra $2 billion considered by the Senate will be spoken for in new sales by the end of this week.
“People who drive by dealerships in a week or two will look at nearly empty lots and say, ‘Whoa! What happened?''' Coffman said. “We could run out of vehicles to sell. That's a good problem to have.''
This report contains information from the Associated Press and Bloomberg News.
Contact the writer:
444-1127, david.hendee@owh.com
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