My 2 cents on Clunkers

[werewolf34]

Some of you may know that I've been trying to put a deal together for a 2010 Prius II/III with the Cash for Clunkers program.

This is my experience.

Buyers
1) C4C has definitely created a sense of urgency on the purchase. It's not so much do I need a 23K car but I need to buy now to save 4.5k
2) I've literally seen people fight over keys. I think the salespeople fight behind closed doors

Dealers
1) C4C has seriously depleted inventory of Prius and Corolla. Given Toyota slowed production before C4C, this lack of smalls cars will hurt dealers in the next couple months
2) Dealers have been paid a small % of clunker money so far. The plumbing is backed up and run by the govt with the dealers effectively financing the C4C income shortfall
3) Dealers (salespeople really) are fatigued and sometimes irritable, making the search process more troublesome then it should be
4) C4C has accentuated both good and bad habits of dealers. Those who skipped ethics have really made putting together a C4C deal a minefield

This program has created a feast and famine dynamic for dealers which will set the stage for future bailouts and economic trouble.

I was a fan at the start but don't think the C4C program should come back next year.

[DianneWhitmire]

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.....................................

Originally Posted by werewolf34

Some of you may know that I've been trying to put a deal together for a 2010 Prius II/III with the Cash for Clunkers program.

This is my experience.

Buyers
1) C4C has definitely created a sense of urgency on the purchase. It's not so much do I need a 23K car but I need to buy now to save 4.5k
2) I've literally seen people fight over keys. I think the salespeople fight behind closed doors

Dealers
1) C4C has seriously depleted inventory of Prius and Corolla. Given Toyota slowed production before C4C, this lack of smalls cars will hurt dealers in the next couple months
2) Dealers have been paid a small % of clunker money so far. The plumbing is backed up and run by the govt with the dealers effectively financing the C4C income shortfall
3) Dealers (salespeople really) are fatigued and sometimes irritable, making the search process more troublesome then it should be
4) C4C has accentuated both good and bad habits of dealers. Those who skipped ethics have really made putting together a C4C deal a minefield

This program has created a feast and famine dynamic for dealers which will set the stage for future bailouts and economic trouble.

I was a fan at the start but don't think the C4C program should come back next year.

[DianneWhitmire]

aaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaa aaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaa aaaaaaaaarrrrrrrrrrrrrrrrrrrrggggggggggggghhhhhhhh hhhhhhhhh.
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.

[RTFS]

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...

[werewolf34]

Funny thing, I was set to clunk in the 1st week but my 1st clunker got reclassified from 18mpg to 19mpg (1987 bmw 528e) so the govt kneecapped me at the start.

[bluetwo]

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.

[DianneWhitmire]

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!!

[frogpond1]

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.

[DrJon]

Originally Posted by bluetwo

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.

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!

[LoraJ]

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