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Published: Saturday, 8/1/2009

Traffic jams at Toledo area dealers causing some headaches

BY LARRY P. VELLEQUETTE
BLADE BUSINESS WRITERS

John and Helen Thomas are not prone to impulsive decisions.

Yet sometime around noon Friday- as officials in Washington scrambled about frantically to try to save the popular "cash for clunkers" program - the Perrysburg couple decided that they could wait no more.

They hopped into their 1999 Dodge Grand Caravan and drove north to Brown Honda where, within a few minutes, they were studying the stereo inputs on a new 2009 Civic Hybrid.

"If they're giving away cash like candy bars, we'll take it," Mrs. Thomas explained as she and her husband looked over the car's interior.

Across the region yesterday, car dealers struggled to keep up with throngs of prospective customers and the scores of vehicles they traded-in under the government's Car Allowance Rebate System, otherwise known as "cash for clunkers."

The $1 billion program, which began only a week ago, was thought to be exhausted already, prompting Congress to start to push through another $2 billion to continue it. The House passed the additional funding yesterday, and the Senate is to take up the matter on Monday.

The White House announced that it would honor any car deals made this weekend, even if the first $1 billion had been exhausted.

But the program - offering up to $4,500 in additional incentives when customers trade in a vehicle less than 25 years old that got less than 18 miles per gallon for one that gets at least 10 mpg more - has been an administrative headache for participating dealers.

"It's just so frustrating," said Beth Sutherland, the finance and insurance manager at Brondes Ford in West Toledo. The dealership wrote almost 40 new car deals under cash for clunkers, but hasn't been able to deliver a single one because the government hasn't yet sent them the certification needed to participate.

"It's sad for the customers, because they've jumped through all these hoops to get us the [required documents like vehicle registrations and proofs of insurance], and then they can't get their vehicle because we're still waiting for the approval to participate."

Indeed, only a small number of regional dealers and just two in metro Toledo - Brown Motor Sales Co. and Yark Automotive Group in Sylvania Township - were certified by the government as of yesterday afternoon, according to the program's Web site, CARS.gov.

Brown Honda sales manager Loren Anderson said nearly half of the dealership's 125 new-vehicle sales in July have been through the clunkers program.

"It's been one after the other after the other after the other. It's swamp city," Mr. Anderson said.

Yark general manager Doug Kearns said yesterday that the dealership had processed more than 100 clunker transactions in the last week - the government program anticipated an average of about 12 per dealer. The paperwork backlog was so long that Mr. Kearns said two data entry employees were reassigned full-time just to input the deals into the government Web site.

"They had occasions where it was taking them three or four hours to put in a single deal," Mr. Kearns said. "They were having their best luck between 2 and 4 a.m., from what they told me."

Yet, that lack of certification hasn't stopped dealers from selling cars and packing their showrooms.

Taylor Kia yesterday afternoon had customers waiting to speak to salesmen, and well over 100 traded-in clunkers littered their Sylvania Township lot, waiting to be hauled away.

And at Yark, Jeff Davies of Great Lakes Recovery was hauling away a lot full of clunkers two at a time, slowly working his way through more than two dozen vehicles. The program requires that the traded-in "clunker" be immediately destroyed.

"I had to stop for a while because I got called to an accident, but this is nothing," Mr. Davies said, surveying the rows of battered Jeeps, Chevys, Mercurys, and other makes. "We already hauled 50 of them away."

Mr. Kearns, of •Yark, said the sales boom generated by the clunkers program, which was modeled after an equally successful ongoing program in Europe, has been just what the doctor ordered for the struggling auto industry.

"It's been great for auto sales and it's done exactly what the government intended, which was to get these old polluting cars off the road and spur auto manufacturing at the same time," Mr. Kearns said.

Contact Larry P. Vellequette at:

lvellequette@theblade.com

or 419-724-6091.



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