Cash For Clunkers: Philadelphia Car Dealers take all the risk for little reward.

August 6, 10:04 PMPhiladelphia Autos ExaminerTodd Agostini

Previous Next

3 comments Print Email RSS Subscribe

Subscribe

Get alerts when there is a new article from the Philadelphia Autos Examiner. Read Examiner.com's terms of use.

Email Address   Include other special offers from Examiner.com Terms of Use

C.A.R.S. aka Cash for Clunkers is entirely too dealer unfriendly.

Lets look at the facts.

1. The dealer and the customer got the information and qualifications of the program at the same time. The dealer had no chance to get any staff trained and had no chance to get all of their ducks in a row.

2. The customer gets their money credited at the time of sale and the dealer has to wait for a rebate to come in the mail from the Federal Government whenever they see fit to credit the dealer.

3. The dealer has to get to pay office and clerical staff to do hours and hours of clerical work to prepare documents necessary to claim the rebate.

4. The dealer has to pay a technician to put a car on a lift and drain all of the oil, and then pour in a mixture to seize the engine.

5. The dealer is then informed that they shouldn't seize the engine "just in case" the car didn't pass an audit and never qualified anyway.

6. The dealer has to pay gas guzzling trucks to pick up the clunker and get it shipped to a car crusher.

7. The dealer then has to follow up with the junk yard and retain all documents proving that the car was disposed of.

8. The dealer gets to make the average profit of about $700 - $1500 on the Non-Clunker Green car.

All in all, this program isn't worth it. Sure C.A.R.S. is selling cars but this whole thing was done backward.

The only thing this program accomplished was to show how stupid it was to ever give the manufacturers money in the first place. If the money was put into a less stringent, consumer driven program, the car companies would have felt an effect that would have proved positive to every sector of the retail car business. The selling of cars generates money to the supplier, manufacturer, laborer, shipper, dealer, bank, and last but not least a residual positive effect to the consumer.

All this program is doing is straining the credit and financial security of the dealer even further. For a government that claims to support the local businessman and the "job creator", they have really devised a way to make the local businessman float $3500 to $4500 to customers that are buying the cheapest cars on their lot.

Imagine you are a dealer. Most dealers are selling 5 - 25 cars a day on this program. Lets just say an average of 15. 15 cars at $4000 a car is $60,000 a day. $60,000 a day at 25 selling days a month is 1.5 million a month. With an average profit of $700 to $1500 on a little Toyota Corolla the dealer is basically putting up 1.5 million to net a little over $400,000 profit before costs. The dealer is left paying the Salesman, Sales Manager, Office Staff, Mechanic, Trucking Company, and last but not least themselves.

The only silver lining to the dealer is this, they get the stupid car off their floorplan loan so they aren't paying interest on these cars that people never wanted to begin with. The hidden demon, they are pulling ahead on future business and slowing down the buying cycle in the up and coming months.

The general public has no violin they want to play for their local Car Dealer. Maybe, just maybe, the Feds will figure a way to support these local businessman that have Little League teams, Shuttle Van service, to keep the Free Hot Dogs coming.

Unfortunately the program is called C.A.R.S. not C.A.R.E.S.