"Cash for Clunkers" Spurred Sales in Week 1 Dealers Hope There's a Week 2

Mississippi auto dealers are waiting to see if the Senate approves more funding for "Cash for Clunkers."

On C-SPAN Sunday, Transportation Secretary Ray La Hood said the Senate must approve $2 billion in extra funding for the administration’s “cash for clunkers” program this week – or the rebates are over. As MPB’s Cari Gervin reports, Mississippi car dealers really don’t want that to happen.

Frank Belk was not exactly happy when his Blackberry beeped last Thursday night.

“When I got an email from Ford and Toyota that as of midnight, they were suspending it.”

Belk owns a Ford and a Toyota dealership in Oxford. And that “it” he’s referring to is the Car Allowance Rebate System – that is, the “cash for clunkers” program.

People trading in their old cars for more fuel-efficient models could get up to a $4500 rebate from the government. Proponents of the plan said it would jump-start car sales and help the environment.

The $1 billion set aside for rebates was supposed to last through November. Instead, as Frank Belk discovered, it ran out within one week.

“I don’t think you can just come out at 6 in the evening and say, we have six more hours and this thing is going off.”

On Friday, the House passed $2 billion in additional funding to continue the program. The Senate must also approve the extra spending before leaving for the August recess.

Frank Belk says he was surprised to have only sold 14 cars under the program in the first week, instead of 25 or 30. But he wants the rebates to continue.

So does Jimmy Gray. He’s the chairman-elect of the Mississippi Automobile Dealers Association and owns a GM dealership in Southaven.

Like Belk, Gray says sales were good last week, but not as good as he thought they would be. And then there’s the paperwork.

“It’s, like, 136 pages. So it’s pretty – a pretty good bit of red tape associated with it. But, you know, we’ll happily take that for sales right now.”

Even if the Senate does not continue the funding, Transportation Secretary Ray LaHood said dealers will be reimbursed for sales made this past weekend.

For MPB News, I’m Cari Gervin in Oxford.