Cash for Clunkers - Does it Work for You?

skilau

No he didn't raise the price.......... The price is dictated by the market. If they are selling at that price everywhere why wouldn't you do the same thing? Have youever gone to a restuaraunt and ordered Lobster? That price changes everyday. One day it could be $5.99 a pound and than the very next day.... smae resturaunt it could be $8.99 a pound....

Wrong analogy. Good try though.

No, this would be like a restaurant having a price of $5.99 a pound listed for that day, but at the end of the meal as soon as you present a coupon for 50% off, he kicks up the cost to be $9.99 a pound to make up for the "extra hassle" of processing that coupon.

Sure, you can argue semantics all day. MSRP this and MSRP that.

But at the end of the day, if the dealer gives a price of $X for a non-C4C deal, and then turns around and gives $X +3K for a C4C deal for the same car, same time, I am sorry, you just raised the price.

Anything else is just semantics, and well, its why car salesmen/dealers have the horrible rep they have.

oldfarmer50

"...ever gone to a restuaraunt and ordered Lobster?..."

You're the second salesperson to use lobster as an example. You guys must be really raking it in if you all can afford to eat lobster. I bet you live in a mansion too.

jeffyscott

The thing you may not understand is what happens for those folks down the road when they need service. They might get free loaners, vehicles dropped off at their house. Maybe a dealer will go out of their way to keep said customer happy.

So the dealership keeps a record for each customer? The service guys brings him up on their computer and it says "Mr. X paid MSRP for his new jalopy, take good care of him" and they then give out a free loaner that he's otherwise not entitled to? I find this scenaroi hard to believe.

More likely Mr. X becomes one of the service customers who comes in and buys the dealers mileage based maintenance packages, filled with unecessary extras and cutting the manufacturer recomended intervals in 1/2 and thus after overpaying for the car also over pays for service.

I get service at a different dealership from where I bought our cars and they seem to go out of their way to keep me happy. I've had the service manager, himself, come and pick me up, when no one else was available. He has also given me a lot of unexpected discounts. I've also had free loaners, but they were paid for by the manufacturer as part of their warranty services.

kathyc2

Are you having people upset that you quit offering before the Monday 8pm cutoff? I would imagine you would as the newscasts are all talking about the Monday cutoff.

It looks like the ending of the program was as poorly thought out as the whole program was administratively. IMO it would have made more sense to have the program end Monday but give the dealers an additional 48 hours to submit paperwork.

aviboy97

Are you having people upset that you quit offering before the Monday 8pm cutoff? I would imagine you would as the newscasts are all talking about the Monday cutoff.

We turned away a few people over the weekend. As soon as we said we are no longer accepting C4C's, they turned right around and left. No one in my area was doing it over the weekend.

I had one instance where this couple walked in with our advertisement that had Cash for Clunkers in it and we turned them away. The made a BIG scene in our showroom. Our ad's are submitted on Wednesday to go into print and we cannot change them after 5pm on Wednesday. News came out on Thursday night, and we made a decision then to stop participating in the program. We got an addendum letter from our ad company that backed up our claim to protect us legally.

It looks like the ending of the program was as poorly thought out as the whole program was administratively. IMO it would have made more sense to have the program end Monday but give the dealers an additional 48 hours to submit paperwork

Your right. Since all deals need to be submitted by 8pm tonight, that made things tough and would have really put us in a time crunch. What would happen if we could not get the deals submitted in time? What if the system was over loaded and booted us out like in weeks prior? We would be refunding money to upset customers. We felt it was best to avoid it all together.

greanpea68

But at the end of the day, if the dealer gives a price of $X for a non-C4C deal, and then turns around and gives $X +3K for a C4C deal for the same car, same time, I am sorry, you just raised the price.

You would be correct in your statement if what you said was true were I am at, but it is not. I can not speak of how everyone does business but here at my store....

We sell at market value.... we have all the reports of what all the dealers gross profit margins are in the area. If vehicles are low in supply and demand is up than the price of the vehicles are up. CFC were not the only deals happening in this time period. No matter if you were a cash for clunka or not everyone was shown MSRP. It did not matter. and ya know what. People signed on the line that displayed "owner"................ :surprise:

GP

greanpea68

You're the second salesperson to use lobster as an example

I think I might have been the original also.... I have been going to beach a couple of times this year and have noticed the price change twice in a week.... I guess I should thank the Govt for providing me with the income to afford such luxuries in life such as Sea Food.... before CFC all I could live on was Ramen Noodles

GP

jeffyscott

IMO it would have made more sense to have the program end Monday but give the dealers an additional 48 hours to submit paperwork.

The only thing I can figure is the government was afraid that the money might not last, if they had been more lenient on the submittal date. By cutting it off this way, it obviously has meant a lot of dealers stopped doing deals several days ago.

If the government had said on thursday, that it is over as of midnight Thursday, but dealers have until monday to submit, people would have been mad at the government, this way they are mad at the dealers instead.

mikefm58

The thing you may not understand is what happens for those folks down the road when they need service. They might get free loaners, vehicles dropped off at their house. Maybe a dealer will go out of their way to keep said customer happy.

Maybe in your neck of the woods that might happen (but I find that hard to believe), but that would never happen here in central Florida.

jeffyscott

I think they make lobster flavored ramen noodles, just thought I'd mention it, since you will need to go back to that now that C4C is over.

jmonroe

You're the second salesperson to use lobster as an example.

I noticed that too but it could be in car sales 101. I’ve also read and heard (not just here) about the games that dealerships (did I say that right ‘aviboy97’?) are playing. I fully understand the concept of supply and demand and I also fully understand the way old school dealerships are run and reneging on a price that was given. I remember when everyone involved in selling cars was irate about how buyers were responding to the poor sales of cars only a few months ago. They felt that buyers were trying to take advantage of the situation and I’m sure some were. I wonder where they got that go for the throat mentality?

Like I’ve said on these forums before…”have you ever heard of a buyer that was about to go shopping for a refrigerator say I better be sure I take someone knowledgeable about refrigerator buying with me”?

Just when I thought there weren’t many old school dealerships around anymore, because of my last 3 purchases, I get an education. Well, that proves to me that you shouldn’t count your chickens before they’re hatched. You’d think at my age I would know that.

Maybe we only hear about the bad ones and think they are the majority but anyone that uses the lobster tale analogy as justification for game playing, is old school as far as I’m concerned.

jmonroe

joel0622

The Gov never ceases. Today is the witching hour to get claims in. We did 33 the last two days ( we stopped clunking at COB yesterday). As we ere entering claims I get this error message.

We have temporarily shut down the site so we can exapand our capacity to more quickly service your request. Please visit the site later.

Its the last day you knuckle heads. We won't need it tomorow. It went down at 10:40 am CST and still not up. Got 5 hours and 45 minutes to get the last 12 reported. :sick:

tidester

Wow!

But the numbers will look impressive. Doesn't 10,000 claims processed in the last hour of the program sound better than 1,000 claims processed per hour on the last day?

tidester, host
SUVs and Smart Shopper

greanpea68

Maybe we only hear about the bad ones and think they are the majority but anyone that uses the lobster tale analogy as justification for game playing, is old school as far as I’m concerned.


Don't woory J I am definatley not old school......

But I am defiantley a few years younger than you.

GP

gagrice

Good luck dude. You are going to need a vacation after this C4C fiasco ends.

wlbrown9

Not on cars again...Appliances this time. I could probably use a new washer. Hey if they get to the "Cash for Golf Clubs" program, I'll definitely be looking.

http://www.thestreet.com/_yahoo/story/10589719/1/cash-for-appliances-on-tap-for-- - fall.html?cm_ven=YAHOO&cm_cat=FREE&cm_ite=NA

tj6968

Cash for clunkers was a terrible program... poorly thought out in all aspects.

It all comes back to the taxpayers and incentives. Anytime the government "hands out" money, somebody pays.

gagrice

This is the one I worry about. :sick:

xwesx

We felt it was best to avoid it all together.

That was a good call, aviboy. The local dealerships I talked to did the same thing and I can perfectly understand why they did it. It may have disappointed a few people, but in the end it saved everyone (buyers and sellers alike) quite a bit of hassle and, inevitably, hard feelings.

british_rover

Back a few weeks ago Juan Williams as on NPR talking about how a Cash for Couches program might be suggested but it would be harder to get through as the furniture industry isn't as deeply rooted as the car industry and less furniture is made here.

I guess he wasn't far off the mark.

imidazol97

> I bet you live in a mansion too.

Speaking of the dealers living in mansion taht someone mentioned posts back...

I tried to look up the large home of a Cincinnati area dealer who used to have one dealership and now must have 20. He was living on a hill overlooking a small town. It was a very nice place for the area and way back when. I couldn't find it in google earth. I tried to look up his name and found other listings for Naples and Marco Island Florida. I guess those are just "other mansions."

FWIW: The definition of dealer is someone who owns the dealership.

british_rover

Lots of stuff doesn't show up on Zillow and/or Google earth for one reason or another.

Not really surprised that the owners' houses show up on zillow so easily. Everyone knows where they llive the land those houses are on has been in the family since the early 20th century.

jmonroe

But I am defiantley a few years younger than you.

OK you got me there but then who around here isn't?

FWIW, you better hope Richard doesn't see how you butchered that word "definitely".

jmonroe

aviboy97

FWIW: The definition of dealer is someone who owns the dealership.

So, when the host Kristie asked the question directed towards "dealers", no one but the owner should reply?

How about when there are many other references made towards "dealers", does that then excluded salesman, managers, service reps, etc??? No, because the term "dealer" refers to the business of a car dealership, not the owner.

mvs1

That doesn't make a clunker owner poor or unable to afford a new car. It makes them financially savvy because they know cars are a depreciating asset. Read The Millionaire Next Door. It's not always the people in the biggest houses and expensive cars that have the money.

What is this based on? is this just your opinion? OK, this is based on a book...

My comment which you referred to was based off an msn.com article from yesterday. It had a few comments about concerned customers getting into payments.

mvs1

Well, they have PCs at work...I've seen them. not sure what they have at home :confuse: I said the same thing. I even walked both of them through the site showing incentives, other posters deals, etc. So they could gather information.

mvs1

The CARS program wasn't even over, and the wife and I received three phone calls from dealers "following up". They were now willing to deal at invoice minus incentives. I could not believe it.

Clunker hangover has begun.

http://www.msnbc.msn.com/id/32544485/ns/business-reinventing_america/

Now differing, opinions throughout the article. I'm very curious how manufacturers and dealers will respond as the packed showrooms dry up literally overnight.

british_rover

The Millionaire Next Door is a book. You haven't ever heard of it?

His opinion is based on what all the dealers here have been saying that most of their Clunker deals were either PIF(Paid In Full) cars or were financed with significant down payments.

Last I checked about 40% of our 90 something clunker deals were cash. The ones that weren't were financed at very low special rates with solid down payments. The people in those cars will never, ever be upside down in them.

explorerx4

one of my friends just traded his 06 audi A4 convertible for a Mustang GT, no loan.
another is looking to buy a new vehicle to replace one that was just totaled by a tractor.
you might hear about this one in conversation with another salesperson.

stever

I received three phone calls from dealers "following up".

That's funny - I reported over in the other clunker discussion that 3 dealers have my name and number and I was wondering if they were going to call me later in the week or next week.

No calls yet. They sure aren't on the ball here like your dealers.

Steve, visiting host

jmonroe

The CARS program wasn't even over, and the wife and I received three phone calls from dealers "following up". They were now willing to deal at invoice minus incentives. I could not believe it.

It doesn’t surprise me. They must think that buyers have a short memory and sadly most do although you don’t sound like you’re one of those. Your right, “Clunker hangover has begun”.

Now differing, opinions throughout the article.

I don’t want to hog all the opinions about that article so I’ll make just one and that is about GM, Hyundai and Toyota ramping up production to meet the loss of inventory on dealer’s lots. We all know that won’t help the C4C program now but if I were interested in a GM car I’d be petrified about what they will produce when putting cars together in a hurry to meet expected sales. Hyundai and Toyota not so much since they’ve pretty much proven they know how to build reliable cars, be it the most fuel efficient small ones or the ones with some creature comforts.

Let the old time way of bickering for a car commence; we all knew the old ways would return.

jmonroe

skigreat

Agree on price over the phone 7/16
Signed form in the mail 7/18
Order submitted 7/20
Goes into production 7/22
Comes off the assembly line 7/31
C4C runs out of $1B around here and I'm sh**ing in my pants.
On the boat 8/4
C4C adds $2B 8/6
Arrives in Bayonne 8/13
Arrives at dealership 8/18
Pick up (My first time at the dealership) 8/21 (scheduled 8/24 then I heard the news)
C4C ends 8/24 (8/21 at this dealership)

Completely stripped base MINI Cooper MSRP 19.2K
my price 18.5K
C4C -4.5K
-my beloved 87 RX7, no scrap value given, but at this point it's the lease of my worries
net price 14K
add back doc fee 239
NJ sales tax on the entire 18.5K, thank you Corzine 1295
title, transfer tags, NJ tire fee. 75
OTD 15.6K

I'd say this was just about perfectly executed with no room to spare. C4C was the only way to get any kind of a significant discount on a MINI. Sorry to hear people were paying MSRP or more on Hondas at the last minute.

A buddy of mind is still waiting for his clunker deal to be approved since before I ordered mine. The dealer never took the clunker in, never executed the contract, just submitted a C4C claim with copies of the paperwork he faxed them, and put up a sold sign on the car for well over a month now. I don't have a good feeling about his chances at this point.

ck90211

With UAW and the US Gov now owning most of GM, there is even less oversight on quality, thus I would be really concerned about buying a post C4C GM.

oldfarmer50

"...I'm very curious how manufacturers and dealers will respond as packed showrooms dry up literly overnight..."

This morning, I saw one of our slimy senators on TV butt kissing the administration's C4C program and touting how people were going back to work all over upstate NY because of it. I supose there will be a short term uptick in production for car lines that have exhausted inventory.

Long term I share your concern that this boom-bust cycle will have a negative effect on the car industry.

zoomzoomn

I don't know a single dealer in my area that has yet recieved their first payment. ZERO! One dealer I was talking to is out $1.8M and waiting to be reimbursed!!! They stopped the program early when they found out how much they are having to go through to get their money back. The process, it would seem, has a certain amount of red tape. It's pretty clear cut, but the dealers keep getting the claimed vouchers rejected for niggly details. Add to that the fact there's up to a 10 day period allowed for response...on the initial claim and the resubmissions. The dealers weren't banking on this type of delay. Literally. Maybe the gov will add interest! Ha!!!

:sick:

Kirstie_H

Let's not bicker and argue over who killed who...
(I know it's gramatically incorrect, but it's a quote)

When I use the term "dealer," I'm referring to anyone who sells cars, mostly because I don't know any better. I mean, a "dealer" in a card game doesn't own the cards - he just hands them out, right?

jeffyscott

Last night about an hour before the end of C4C, I saw a TV ad for Ford touting $4500 if you "let Ford recycle your ride".

This morning I heard a Mazda C4C ad on the radio (it also seemed like about half the ad was audio "fine print").

Kirstie_H

I'm sure that ad purchases are made in advance, and it's pretty hard to change these buys on-the-fly. Kinda stinks to have paid for advertising that's not applicable, though.

gagrice

There was a cool ad this morning on talk radio. A guy taking his friend for a ride and they have to crawl through the window because none of the doors work. No brakes so he uses the neighbors hedge to stop. It was C4C clunkers at a local Toyota dealer ad. Really pretty funny. Just a bit late. Those get programmed into the schedule sometimes a month in advance.

A double whammy if you paid for C4C advertising that is useless and do not get paid on the clunker sales you made.

lemko

Good thing about having at least one car in your household paid for. If the repo guys come for your ride, at least you still got transportation. I can get my car popped, and still have three cars at my disposal.

aviboy97

I'm sure that ad purchases are made in advance, and it's pretty hard to change these buys on-the-fly. Kinda stinks to have paid for advertising that's not applicable, though.

My store ran into that problem over the weekend. We had a C4C ad go into print for the weekend, but, it had to be finalized by Wednesday of last week. Thursday they announced the program will end on Monday. We had stopped participating in C4C on Friday because of this news.

stephen987

How will you handle it? Do you think there are a lot of customers who will try to insist that you do the deal even without government reimbursement, ("well, you advertised that. . .") or do you think most of your customers (Mazda, right?) are well enough informed not to expect it?

freezed

This morning I saw the first "post-C4C" TV add from GM. They are already preparing for the upcoming slowdown by promoting a "red tag pricing" event at your area Chevrolet dealership. Too funny.

greanpea68

What is this based on? is this just your opinion? OK, this is based on a book...

My comment which you referred to was based off an msn.com article from yesterday. It had a few comments about concerned customers getting into payments.

I have to agre with MSV.... There many people out there with more money than they know what to do with thta drive regular cars and live in regular houses.... and I have read the book (actually listened to the cd's) and I have to agree with it.

As for consumers that did the CFC..... there non in my area that were credit challenged.... maybe a the lowest score was around 680 but that was only because they ahd a lot on their breau (what ever way you spell it)

GP

greanpea68

A double whammy if you paid for C4C advertising that is useless and do not get paid on the clunker sales you made.

Not really.... The main purpose of advertising is to get the "Name" of the store out there, and to also get the direction or contact info to the store out to the public. all advertising is, is just tool for name recognition.... It is the same thing with all the screamer adds you see in the paper.... you get there and the car was sold :sick:

So I wouldn't say it is entirely a waste.... And yes you may still the Adds becuase they were all paid for and put into a schedule for the public.

GP

british_rover

I only have one car that is actually mine I get a demo from work remember?

Oh and I have my motorcycle too but it is still all in pieces and will be for months.

aviboy97

How will you handle it? Do you think there are a lot of customers who will try to insist that you do the deal even without government reimbursement, ("well, you advertised that. . .") or do you think most of your customers (Mazda, right?) are well enough informed not to expect it?

We had a couple people that said "well, you ad says...." and all but one were OK once we explained the situation. For the one who threw a hissy fit, and had to explain how advertising works, and how far in advance we need to get our ad into print. We also pointed out the fine print that states "dealer participation can end without notice or when funds are exhausted"

Yes, I am a Mazda store. The one couple who got a little irate was not the typical "Mazda buyer" per say, more like someone only out for the "deal".

joel0622

It was a fantastic program from our stand point. Generated more business and excitement here then any manufactures program ever has. We ssold 107 cars off of it and my guess is that 80% of them never would have bought a car from us if it were not for the program, so it is not like we pulled any business forward.

It accomplished what it set out to do. The ripple effect is huge on how it helped the economy. Not just car dealers either.

I for one from the dealer side am very very happy with the program. The slow pay and application procedure could be better but it will all come out in the wash.

joel0622

Yesterday was our first non clunker day, we were busy as hell. Today is day #2 and have deliveries scheduled all day. I don't see the hangover yet.

lemko

...in the Philadelphia newspaper about the guy who did the last C4C deal on the last hour of the last day of the program. He traded a 1995 Lincoln Continental for a 2009 Chevrolet Aveo. Now, do you really think a man who's been driving a Lincoln Continental is going to be happy puttering around in an Aveo? If this was 30 years ago, it would be like a guy who had a classic 1965 Continental and traded it for a 1979 Chevette!