My 2 cents on Clunkers

Re: My 10 cents on Clunkers

Ohhhhhhhhhhhh don't get me started.
LOL!
I echo everything else below... and this:
I have seen THE WORST tension with customers when their documents are not complete. OhMyGod, you'd think *I* was the one who didn't provide the right documents! I've had folks stroll in with COPIES of their titles, titles that are scrawled all over like table mats at a restaurant, names that don't match on docs and FORGED documents that are so obvious, I can't believe anyone's trying to run 'em past us.

I have also seen/heard people "appalled" when we're out of the lower priced stock of models like Prius, Corolla, Yaris, Ravs, etc... yet their conversations later gravitate to being thankful I had their car, they had called EVERYWHERE and no one had this car... I'm pretty near the entertainment industry hub where I work but I sure have talked to a lot of bad actors lately LOL!

As a dealership, we are all exhausted. We are also concerned because the funding of the cars is slow, cash flow is a concern when you have hundreds and hundreds of thousands on the line, and your documents are perfect and pristine and they turn them down or don't fund BECAUSE the DRIVERS LICENSE copy is tilted. Or, the document/title is copied too dark, even though it's perfectly legible. Or, insert many stupid reasons here.

I think we've been funded on 14 deals - out of 240?!
Meaning, we're OUT close to a million gross right now. That is cash that had to go to Toyota Financial to pay off the cars sold - even though we were not funded enough to pay the cars off, we have to come up with that cash... and don't suggest using the $ you collect for tax and title.. that's a no no...

I ask everyone who's called in the past 2 days asking for a II or a III "why the heck did you wait so long?" and I get a lot of different answers, but nothing that's understandable to me. I bet every one of the disappointed folks who can't find a II or a III are either paying way over MSRP for their cars and not admitting it, or they are kicking themselves for wasting precious time trying to negotiate when the market was firm and wiser folks were accepting it and getting cars.

That said, you are right there below. We are exhausted. We're concerned because inventory is drained and there is no selection to speak of. We're tired of doing 10X the normal documentation on car deals... and if one more buyer asks me for a II Prius and acts SURPRISED that I am sold out.....................................

 

and the last nickel

aaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaarrrrrrrrrrrrrrrrrrrrggggggggggggghhhhhhhhhhhhhhhhh.
I just had to say it.

OK. I'm done venting.

C4C is over.

I've met some very cool people and I have met some real ... well, NOT cool people, especially today! People pissed at me because they didn't have the right documents or things missing, and get this: "no selection" ROFLMAO.

Good LORD do I need a day off.

 

I went looking in early July and had no trouble. I was actually able to get somewhat of a deal at 23,300 for a III because I was so early. The dealer wasn't taking clunker deals at that time but I was able to place an order for delivery after c4c started. It all worked out great for me since I displayed a sense of urgency to the dealer early on. Simple calculations told me that $1B would only support a little over 222k transactions. A quick look at NADADATA showed that to be about a weeks worth. It seemed like an eternity for NHTSA to get the rules out but 3 days after they did I was in my new Prius. I confirmed with my sales guy they got an approval number for my transaction.

From a taxpayer standpoint, this is a raw deal but what the heck, somebody is going to get it so why not me? I traded in a 88 Cherokee with 214k miles and realized a 375% profit on it's purchase 3 years earlier. Financially, I'd have to be a bit crazy NOT to take advantage of c4c. That final drive to the dealer felt a lot like I was taking a friend to the gallows. I just had to keep reminding myself...it's just a machine...it's just a machine...

 

I've literally watched the Seeger Toyota/Scion clear out about 50%, if not more, of it's inventory over the last three weeks. I didn't believe it was due to the CARRS program at first but now it's completely obvious because there are a whole bunch of crap cars in the back lot.

I wish I could say I think people have learned a lesson from the mishaps that have happened with this program but it's more likely that if there were another iteration of this thing people would scramble just as frantically as they did this first time. People are like stray kittens gobbling up that little bit of meat as if they were afraid they'd never get another chance to eat again. The grab it while you can attitude is exactly what got the government in financial trouble from the start.

 

cars cleaned us out but good.

We normally stock between 350 and 400 cars and trucks. I've seen 500+ here often.

I am staring at a lot that now resembles a cross between a ghost town and a junkyard. We have less than 90 units in stock and hardly any of them are 4cyl vehicles... it's pathetic.

Unlike what many think, there is STILL a strong market for car buying when it comes to Toyota. But, with few cars to sell, demand will stay strong till the lots are full of cars again. Folks without clunkers have pretty much steered clear of all car dealing lately other than Prius buyers, who paid the same anyway.

I can't even imagine what the next wave will look like. Love the adventure though!!

 

What really concerns me is this C4C could really set up a disaster. People oh so eager to get something new and the opportunity to get rid of their old vehicle are now stuck with car payments that they may not be able to handle. Like the mortgage crisis I see this turning into a car loan crisis over the next year.

 

This program turned out to be a lot easier for the customer than the dealer (right Diane??!!). The docs they had to provide, the rules, etc.

I was supposedly the 8th deal at my dealership and they did not even know that they had a form I needed to sign specifically for the clunkers program! I had to tell them to pull the page from the appendix of the rules, etc. I actually knew much more than them about what was involved on their end to get paid! I went in yesterday and the Sales manager told me that they still hadn't got paid on any clunkers deals yet. Really, it just confirmed for me how poorly prepared they were to deal with the intricacies of a government program. Every little i needs to be dotted and T crossed. I know personally. I have had to deal with the feds on a few health care programs and sometimes you have to say to yourself "Wow, is the headache really worth it?"

Diane, you deserve a day off or three, what the heck, take a vacation!

C4C RIP!

 

Dianne,
I think a spa day is in order!!!!!

 

maybe. some of those same people however can probably also sell their cars for more than what they paid right now too

 

Funny, my clunker was not qualify from KBB.com, then the following week when the program started, it was classified as a clunker.
(91 Previa all trac)

 

You know, I don't know if it was specifically MY buyers or the dealership's buyers for cars but half our customers paid cash. I know that of all my Prius deals with clunkers, 50% paid cash for their cars. So... they HAD the money, they were just unwilling to part with it till it became a no-brainer. I personally didn't sell a single car to anyone, based on credit history or income, who couldn't afford what they were signing for. Not from my experience... and I will usually SAY something when I think a wiser decision is not being discussed.

Di

 

Yes, it's proved to be a better boon for the buyers that's for certain! I heard that thru last Friday, of all 300 deals we did ... we've been formally paid on 11.

Other than venturing out for local lunch with my son (a Lance Corporal in the Marines at Camp Pendleton, who's doing some equipment training for 6 weeks at Miramar) and a trip to the local grocery store, I slept and rested most all yesterday. But, I am back for more today. I crave normalcy for the workday but of course, wrapping up C4C will be the focus this week. And, restocking the proverbial shelves with new product to sell!

Thanks DrJon! I'll settle for quiet office time and peace of mind to organize my office, which I left in disarray for most of the week! Anyone who WAS in my office can attest to that fact....looks like two bears were makin' love in there and one of them didn't want to... heh.

Di

 

No kidding! A Spa WEEK!

 

My aunt, who has a very limited income, needs reliable transportation, and could have really benefited from the c4c program, didn't qualify because in theory, the old rattling maxima she bought last year to get from job site to job site, gets over 19 mpg. In reality it gets less than 16, she has figured her cost per mile.

If the people taking advantage of the program where people who could afford to pay cash, then I'm wondering if the majority were trading in a second car, or a third...spare transport that was not being used very much anyway.

The effect that will have is:

The people that really needed the 4500 were LESS likely to get the deal because the burden on the dealerships was so intense, what salesperson is going to go the extra mile to find financing for someone when there are 10 people waiting who have cash to pay?

The people who buy those clunkers regularly are people who can't afford any other transportation and we have just effectively cut their available inventory down, which will raise the price of the remaining ones. The salesperson we were dealing with this weekend in Hermiston was cheering because now his "worthless" old pick ups and SUV's will fetch a lot more come hunting season ( around the corner) because there will be fewer to choose from.

I know the intentions of the program were good, I just wonder if they really thought it through.

 

Octavia, in a biz sense, your theory is wrong.
I'd rather have financed every single one. We don't turn cash buyers down but as a rule, folks financing are easier to track for future sales thru TFS at least and make "trade it now" offers to (and more likely to trade a car eventually) and also, a tad more generous in finance with extras such as warranty products and alarms. Adding a few bucks to a car payment a month is easier to accept than making a check out for hundreds and hundreds more for extras. It's psychological. And, let's face it. Clunker keepers are going to want to keep THIS car even longer... 75% of these cars will be the Clunker in their homes in 15-20 years.

The idea was to get the guzzlers off the road - help the air quality and help the economy in the auto biz for many manufacturers. I didn't get many cars from folks who had just bought them. I took cars out of households after 1-2 decades.

This program hurts folks like your aunt in a way you won't see... because folks like her looking for cheap transportation in tough times won't find many old beaters now. They are being crushed in the thousands this month... meaning they will have to upgrade to better cars with better fuel economy and perhaps a tad newer... because buying an old car from a private party just became harder.

 

I understand your point, and you're right, I did not consider if from a profit point of view. I was looking at the difficulty in finding financing for someone like my aunt, on social security, with a variable income based on what she can earn month to month and figured that from a salespersons perspective.. why do that if you don't have to? Neither demographic would be highly profitable in my guestimation!

I think we are saying the same thing about the long term consequences though. I agree that the intentions are good and I like the idea of moving towards greener thinking and cleaner air.. very much so, what prius lover doesn't? ^^

I work predominantly with poverty issues and just notice in the case of this program, as in so many others, there are fall out effects that hit those living in poverty hardest of all. Some people can't move to newer, better cars. What are they going to buy with the 1500 bucks now?

In the case of my aunt, my initial hope was to take her to the dealership, with her clunker and get her into something I could help her afford. Basically, the 4500 from the government added to her gas savings and repair cost savings, might have gotten us to a point on an entry level car, that I could have funded the remainder of her payment.

 

The intent of the program was to get people to buy new cars and thereby keep auto workers in employment for a short period. In this regard it's a success whether it was a rich guy trading in his third car or someone trading in their only means of travel. The fuel consumption improvement was a sop to the environmental lobby, really. Improving the performance of 250,000 cars was never going to have a huge impact on the 100 million cars on US roads.

The UK scheme only provides £2,000 off the VAT-inclusive price, but our prices are a lot higher - an entry-level Prius is over £18,000 on-the-road. There are no fuel consumption limits, but the car traded in must be at least 12 years old - we're relying on the general improvements in economy since then. The scheme is 50:50 government:manufacturer funded, so the £300m can fund 300,000 cars. Even so, this is less than 10% of the cars that qualify. If someone's driving a car that old, you have to assume there's a reason!