Dealer-Sponsored Automobile Stimulus Program Keeps Participants Profitable

Roughly fifty dealerships nationwide launched the privately funded “Automotive Stimulus Program” in hopes of filling the gaps left by the federal Cash for Clunkers program this past summer, and that decision seems to be seeing them through this slow post-CARS sales period.

Participating dealers decided to start the program in July, before the scheduled August 14th date due to the instability of the CARS program at the time. Since it began, it’s been boosting sales numbers for all involved.

One of the key components of the private incentive plan is the inclusion of used cars as a choice of replacement. The dealers also decided that all models older than 2007 would be eligible for trade in. Brian Benstock of Paragon Auto Group in New York City said that the government CARS program “left out nearly half the potential market” and that they “wanted to come up with a program in that [sic] no car would be left behind.”

As a result, buyers that couldn’t qualify for CARS with imported 10-15 year old models that got decent gas mileage could still take advantage of the private dealership program. Those that wished to purchase used cars to fit their budgets could do so under the plan, and prospective buyers of cars with fuel efficiency ratings that didn’t quite make the government standards could participate as well.

By attracting the consumers left out of Cash for Clunkers, these dealerships have been able to cash in on the government program and continue the sales surge by maintaining their Automotive Stimulus Program on an ongoing basis. Nationally, sales numbers for car dealerships have plunged dramatically since the end of the CARS program. Automotive Stimulus Program participants, however, have enjoyed a jump in market share because of a lack of competitors.

Benstock reports that Paragon Honda has not seen the drop in sales that many competitors have experienced since the end of the government plan and has had no reduction in used car sales. Paragon moved to 5th highest volume sales dealership in the nation during the clunkers program, and is now 6th in the nation. Prior to May, they were in 17th place.

Other success stories include Rick Case Automotive. The dealership, which is now the 5th highest volume dealership in the nation, enjoyed an increase in sales in September when most non-participating dealerships saw their sales numbers plummet. Germain Automotive, another private plan participant, is also experiencing solid, ongoing sales.

Current Requirements for the Automotive Stimulus Program include:


Current vehicle is a 2006 or older


Current vehicle is operable


Current vehicle has been owned for a minimum of 6 months


Current vehicle has been registered for a minimum of 6 months


Current vehicle has been insured for a minimum of 6 months


The replacement vehicle has to be more fuel efficient


Incentives vary based on current vehicle and desired vehicle


Incentives vary by State, Make and Model. Incentives may vary in some states due to state laws that regulate to automotive advertising and promotion

The program was initially scheduled to end when the federal CARS program was terminated but has been extended through November 1, 2009. You may visit the group’s Website to locate a participating dealer in your area and learn more about the program.

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