CONYERS - Local dealers are taking a wait-and-see approach this week on continuing their participation in the federal Cash for Clunkers program following concerns that the program may not continue.
Officially known as the Car Allowance Rebate System, or CARS, the program was established to encourage car owners to trade in their older cars for newer, more fuel-efficient models.
If a person has a vehicle that is less than 25 years old, is drivable, gets 18 miles per gallon or less and has been titled and insured in his or her name for a year, the CARS program will offer up to $4,500 in credit toward the purchase of a new car.
The federal Department of Transportation started the program on July 27 with an end date of Nov. 1 or whenever the money ran out.
The program was popular beyond anyone's expectations, and a run on car purchases caused it to run out of money within days.
Jason Moore, general manager of Kia of Conyers, said his dealership had participated in the program in the beginning but as of Wednesday was holding off on accepting trade-ins until more money is approved by the federal government.
He said the biggest problem was the inability to get reimbursed for the Cash for Clunkers credit. Under the guidelines, car dealerships provide the program's discount, then handle the paperwork and file for a reimbursement.
However, Moore said there was a concern on when those reimbursements would come from the government, especially after hearing the program had run out of money.
"We're a small dealership and for us to be out of pocket for $100,000, well, that's a lot of money and something that is hard for us to work with," Moore said.
With that said, Moore added the Cash for Clunkers program helped get people in the car market. He said once the funding issue is resolved, his dealership would be back in it.
"In the next five minutes if we get the news the program is funded again, then we're back," Moore said.
Tim Cartledge, general manager of Ginn Motor Company in Covington, said the program was great for them in generating business, but Ginn stopped applications Saturday until more money is available from the federal government.
"It has generated business and we're taking care of our customers, but the huge amount of money we're waiting on is enough for us to go into a holding pattern," Cartledge said.
At Town and Country Chrysler, Dodge and Jeep in Conyers, owner Steve Harris said his dealership took slow steps to become a Cash for Clunkers participant when the program was announced.
Harris said there was some confusion on the process in the beginning from both customers and his sales staff. Town and Country had done three applications, so far, and wants to do more.
"We've done very little with it, but we are going to lift our efforts in it because it seems that we have a little bit more understanding in it," Harris said.
Cartledge said he experienced the same confusion from customers, which was mostly over which cars qualified for the credit. He added getting applications processed was not easy.
Dealerships and car shoppers alike are waiting for the U.S. Senate to decide whether to keep the program going with an additional $2 billion.
Senate Majority Leader Harry Reid, D-Nev., said Tuesday the Senate will vote to extend the program before senators go home Friday.
The Associated Press contributed to this story. Jay Jones can be reached at firstname.lastname@example.org.