Owners ready to cash in their clunkers
If you've got an old gas-guzzling clunker, it could be worth as much as $4,500 to you, starting this Friday.
That is, if you're prepared to trade it in toward a new, more fuel-efficient vehicle. On Friday, auto dealers will start selling cars under the federal government's cash-for-clunkers program.
Jesse Dumas' 1994 Ford F-150 pickup truck has about 150,000 miles on it. And it's showing its age.
Rust is eating away at its underside and wheel wells. It's got more than a decade of dents and dings, including a sideswiping this month that jammed shut the rear gas cap door. It's also a gas guzzler, getting a mere 14 miles per gallon.
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Dumas is eager to dump it.
"I'm hoping to trade it in here and get something a little bit more economical thanks to the American government," he said.
The federal government has set aside $1 billion to encourage owners of old gas-guzzlers to trade them in for new fuel-efficient vehicles. Consumers can get a trade-in credit of up to $4,500 for vehicles that get 18 miles per gallon or less.
The official mileage rates can be found at fueleconomy.gov. They also have to have been built since 1984.
Dumas said $4,500 would be a heck of a deal for him. He figures his truck might be worth $1,000, if he could find a buyer for it.
"It's a heap," he said.
But Dumas has to hope his F-150 survives until next month. That's when it will be eligible for the cash-for-clunkers program. "It must be registered to the same owner and insured for an entire year before it's eligible," he said. "I think my magic number is August 8."
The cash-for-clunkers program has enough money to help car dealers sell about 250,000 vehicles nationwide.
For dealers, that's a nice --but certainly not tremendous-- short-term sales kick.
Scott Lambert, the executive director of the Minnesota Auto Dealers Association, noted that Minnesota auto dealers sold about 125,000 vehicles in 2008.
"We might sell three to five thousand cars out of this. I think that's a reasonable goal."
Lambert said $1 billion isn't all that much money when spread among thousands of car dealers and millions of prospective car buyers. And Lambert points out that the folks with the clunkers have to be ready to make payments on a new vehicle.
"You're still going to end up with 10, 15, 20 thousand dollars in car payments you're going to have to make," Lambert said.
Most dealers have been holding off on trying to sell cars under the clunker program, waiting for the program's official start. But some dealers aren't waiting.
The Walser family of dealerships has been running a clunker pre-sale at the Honda store in Burnsville -- and other locations. Walser has hundreds of sale agreements with buyers ready to cash in on their clunkers. The transactions will start to be finalized Friday, when Walser can be absolutely sure the feds will cough up the cash for the clunkers.
"We don't want to get stiffed by the government if they change something at the last minute," said Doug Sprinthall, director of new vehicle operations for the Walser dealerships.
He says Walser increased its inventory of Civics, Corollas, Camrys and other fuel-efficient cars for the clunker program. They're selling well. Clunker sales will probably account for about a one-third of Walser's sales this month.
"It's really helped business, that's for sure," he said. "We should sell about 300 to 350 of the cash-for-clunkers deals this month."
Benn Stumph of New Market will be doing one of those deals. He'll be trading a 1991 Dodge Dakota pickup for either a Honda Civic or Mazda 5. The pickup has just 55,000 miles on it. But it's rusting, leaks oil and sucks gas. "About three months ago, we were going to trade it in for about $600," Stumph said. "And now if we trade it in, that same truck, it's worth $4,500, instead of $600, So, it's a little bit of a windfall for us."
Stumph won't wait to pull the trigger on a deal. He trusts the clunker cash will go fast.
"We know we have a vehicle that qualifies," he said. "We want to act quickly."
There's some additional good news for folks trading in their clunkers.
The state of Minnesota said clunker trade-in credits will reduce the taxable value of new vehicles, which adds about another $300 to the $4,500 in savings.
Clunkers taken in trade will be crushed or shredded to prevent resale.
