Used Car Lots: Program Should Be Scrapped
August 7, 2009, 5:52 PM
'Cash for Clunkers' has been brought back to life. President Barack Obama signed an extension into law Friday morning after the popular program ran out of money and stalled in just a week. The additional two billion dollars in stimulus money is now expected to keep it running until Labor Day.
Some car dealers wish the government would have let the program run out of gas because it's taking hundreds of thousands of used cars off the roads. Used car dealership say the government program is crushing part of the car industry.
A 1996 Chevy Blazer may be a 'clunker' in the eyes of the government, but at less than $5,000 on the used car lot, dealers say it's a vehicle customers can afford.
"The $10 to $12 to $15 an hour worker that's trying to keep his head above water and providing for his family and everything, these are the kind of cars they are used to buying and can only afford to buy," Law Motors manager Gerry Holley said.
The Law Motors lot in Sioux Falls is full of cars considered 'clunkers.' But Holley says vehicles in the $3,000 to $5,000 range may soon become extinct.
"There aren't going to be any to be found pretty soon. We're going to exhaust all the opportunities to obtain these cars because the government is going to take them and crush them," Holley said.
And as the affordable ones disappear, independent car dealers across South Dakota say the program is pushing people into brand news cars they can't afford.
"It was just a few years ago that the government tried to put people in houses they couldn't afford and we know what the result of that was," Jerry Vogeler Executive Director of the South Dakota Independent Car Dealers Association said.
"All they are doing is creating a customer base that was already there to force them to buy cars now," Holley said.
And that's why used car dealers say 'Cash for Clunkers' is not all its 'clunked' up to be.
The state's Independent Automobile Dealers Association also says since the 'Cash for Clunkers' program is reducing the number of used cars on the road, it's also driving up their price, making even more cars unaffordable for some customers.
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