Local car dealers have mixed feelings about the government's Cash for Clunkers program, which is scheduled to shut down Monday, less than a month after it started.
On the one hand, they say it has been hugely successful in bringing people into their showrooms, especially customers unaccustomed to buying new cars.
"It is, frankly, a great stimulus," said Dane Whitmoyer, president of Whitmoyer Auto Group, Mount Joy and Elizabethtown. "It has put money in the hands of consumers."
On the other hand, dealers would really like to get paid for all those clunkers people have been trading in.
"I've taken in, so far, about 45," Whitmoyer said Thursday. "I've been paid for none. ... Between the two stores, those 45 deals, it's probably $200,000 they owe me."
And all of those clunkers are still sitting on his lots. "I can't do anything with them until I get paid," he said.
As a stimulus, the program has been "a shot in the arm, for sure," he said. Administratively, it's been a nightmare.
Much of the problem stems from the program's popularity. In the first week, it became apparent the $1 billion the government set aside to buy the gas guzzlers would quickly run out, prompting Congress to rush through an additional $2 billion.
Under the program, buyers receive $3,500 or $4,500 off the price of a new vehicle by trading in their old gas guzzlers, the amount depending on the difference in fuel efficiency between the clunker and the new vehicle. The motor of the clunker is then destroyed.
The program's success created a logjam of dealer applications, prompting the U.S. Department of Transportation last week to triple the staff devoted to processing the paperwork.
Then Thursday, the department announced that it would shut the program down at 8 p.m. Monday to avoid exceeding the $3 billion set aside for it.
By then, the government had already received more than 450,000 applications from car dealers representing about $1.9 billion in claims.
"Payments have been very slow coming back to us," said Pete Hondru, president of Hondru Auto Group in Manheim and Elizabethtown.
Hondru said many of the 40 or so Cash for Clunkers applications his four dealerships have submitted have been approved by the government, but so far they've received payment on only about five of them.
Other than that, Hondru said he has no complaints about the program, although he does wish he'd had more inventory when it began.
"It's hard to tell what the real numbers will be" in terms of increased sales, Hondru said. "It's created some additional business when we had the inventory to handle it."
Whitmoyer, on the other hand, thinks the program may have doubled his new car sales over the past four weeks.
It has also been good for his used car sales, Whitmoyer added, because about half the people who came in to inquire about Cash for Clunkers had old cars that didn't qualify, and some of those customers decided to trade up for a better used car.
Dealers who carry only used cars may have been adversely affected, though, Hondru said.
"Some of the cars they're crushing are pretty nice units that could have been resold to someone who could only afford a $3,000 to $4,000 car," he said.
Matthew Burns, a partner at Cheap Heaps in Lancaster, doesn't see it that way.
In the long run, he said, Cash for Clunkers will probably help his dealership by taking those cars off the road.
"The Toyota Corollas in that price category are going to go up all that much more" in value by having those older gas guzzlers off the road, he said.
That's also going to benefit the environment by reducing the total overall fuel consumption, even among drivers of older cars.
Whitmoyer and Hondru both said the program seemed to be very successful in that sense with a lot of pickups and larger SUVs getting traded in for more fuel-efficient vehicles.
"No question, the big winners were Toyota and Ford," Whitmoyer said.
Models both dealers mentioned as being popular include the Ford Focus and Escape, Chevrolet Cobalt and Equinox, Dodge Caliber and Chrysler PT Cruiser.
"I'm totally out of the Focus, out of the Escape," Whitmoyer said.
"People are getting out of really poor-mileage cars. There's been quite a spread on that," Hondru said. "I think that's been a real positive."
Will business fall off now that Cash for Clunkers is ending?
"When the program goes off, I think sales will soften," Hondru said.
With inventories down, he explained, manufacturers are unlikely to offer the kind of rebates that bring new-car buyers into the showroom.
Whitmoyer has a different take on his prospects.
"I don't think it's going to slump back down like you hear when you listen to the talking heads," he said.
New-car sales had been in a slump with the recession, Whitmoyer said, but he'd noticed an uptick in June and July before Cash for Clunkers started.
And it wasn't the regular new-car customers who were trading in clunkers, he added.
"My normal new-car buyer is still out there," he said.
Dennis Larison is editor of the business section and can be reached by telephone at 291-8753 or by e-mail at dlarison@lnpnews.com. 
