Dealerships across the country have enjoyed increased sales from the government rebate “cash for clunkers” program but report that they are running low on new car inventory.
Larry Miller Honda in Boise is nearly out of 2009’s, and their lot is two-thirds empty. In Beaver Springs, Pennsylvania, owner Michael Andretta has decided to shut down his Chrysler/Dodge/Jeep dealership for a weekend and repave his lot.
Andretta said, “I’m out of cars. I do not have a single car in my dealership that qualifies for anything.”
Earlier this year, car dealers suffered from huge inventory overstocks and lagging sales as consumers tightened their belts in order to survive the recession. Now it seems the pendulum has swung in the opposite direction.
The government CARS program was recently approved to receive an additional $2 billion from Congress because of the massive popularity of the program. Before Congress approved the additional funds, it was feared that CARS would simply run out of money and have to stop accepting applications.
Many new car buyers are now having to compromise on details like colors and options in order take advantage of the federal incentive program. In some cases, they have to settle for their second or third choice of vehicle.
Business at dealerships around the U.S. does seem to be slowing a bit. Sales manager Anthony Ciuffo of Crown Ford in Lynbrook, N.Y. says that at their dealership, walk-ins are fewer but phones are still ringing regularly. He said, “It seemed that there was more sense of urgency prior to passing the bill. People feel that they have a longer window of opportunity.”
Ciuffo also reports that after selling out of Focus sedans and Escape SUVs, it might be a seven to ten day wait for more vehicles to stock the lot. He expects sales to remain slow.
Customer attitudes are changing as well; some buyers are finding out that their cars don’t qualify for a rebate under the clunker program, and this is letting the air out of what started as an exciting incentive to look for a new car.
Some dealers around the country are reporting that sales of all cars, new and used, are definitely on an upward trend. Incentives from dealers, and not just Cash for Clunker incentives, have lured many hesitant buyers in to the showrooms again. Automakers and their dealers appear intent on attracting new car buyers with great deals that will be available long after the government rebates are gone.