Joe Moran signed on the dotted line yesterday to trade in his beat-up 1998 Ford Windstar for a new, silver 2008 Jeep Compass for his wife.
Moran, 56, of Florence, Burlington County, said the temporary suspension of the Cash for Clunkers program late Thursday and its speedy reinstatement yesterday were enough to persuade him to pounce on the chance to shave $9,000 (using a $4,500 rebate and Chrysler's match) off the Jeep's $20,910 price tag.
"I got a call from the Dodge dealer at 11 a.m. that it was back on," Moran said as he signed a purchase agreement with sales specialist Scott Streeter at David Chrysler-Jeep at the Philadelphia Airport Automall. "That's when I decided to get it done now.
"You never know if this opportunity will come again, or will be as good."
Customers such as Moran and local auto dealers reacted with a mix of joy, urgency, and relief over news that the rebate program meant to spur new-auto sales by removing gas-guzzling, environmentally unfriendly cars from the highway, would receive an additional $2 billion in funding from Washington.
The House quickly voted 316-109 to re-fund the program, also known as the Car Allowance Rebate System, or CARS, after federal officials were stunned to discover its success had drained its $1 billion financing.
This was a federal stimulus plan that clearly was doing its job.
House Majority Leader Steny H. Hoyer (D., Md.) said the new money for the program would come from funds approved earlier in the year as part of an economic-stimulus bill.
The Senate is expected to take up a similar measure next week, but U.S. auto dealers have been told to continue to conduct deals on the assumption the extra $2 billion is on the way.
Dealers began registering to participate in the Cash for Clunkers program July 24. The program is scheduled to expire Nov. 1.
"I want to thank leaders in the House of Representatives for working quickly and in a bipartisan way to pass legislation that will use Recovery Act funds to keep Cash for Clunkers going," President Obama said in a statement yesterday afternoon.
"This program has been an overwhelming success, allowing consumers to trade in their less fuel-efficient cars for a credit to buy more fuel-efficient new models.
"It has given consumers a much needed break, provided the American auto industry an important boost, and is achieving environmental benefits well beyond what was originally anticipated," he said. "The program has proven to be a successful part of our economic recovery and will help lessen our dangerous dependence on foreign oil, while reducing greenhouse-gas emissions and improving the quality of the air we breathe."
Congress passed the Cash for Clunkers bill in June. The program works this way:
Dealers pay customers a credit for trading in old cars and light trucks for new, more fuel-efficient vehicles. The credit amount depends on how much better mileage the new car purchased gets vs. the clunker (5 to 9 miles better earns a $3,500 credit, and 10 miles better or more earns a $4,500 credit).
The dealers file for reimbursements from the federal government for the credits the dealers extend to customers. Customers must show proof of insurance and registration on their older vehicle for at least the last 12 months.
"Without question, the Cash for Clunkers program has been very successful in accomplishing its goal of boosting new car and truck sales," said John McEleney, a multi-franchise dealer in Iowa and chairman of the National Automobile Dealers Association.
NADA is working with federal transportation officials to ensure that every dealer is reimbursed by the National Highway Traffic Safety Administration for every valid deal, and that the process is fair and orderly. Dealers have complained that the program has been mired in red tape, as processing the deals and recording them on the government's Web site have been a problem.
On the upside, dealers say they have seen more customers over the last week than they have in several months.
Colonial Volkswagen-Subaru, of Feasterville in Bucks County, has been running TV commercials that virtually scream the Cash for Clunkers program. The dealership has sold more than 20 cars because of the program, said sales manager Bill Seltzer. He is expecting a huge turnout this weekend.
"The number of people coming in has more than doubled," he said last night. "We've had a nice flow of people. It's stimulating the auto industry. We knew it was going to be a big program."
Salesman Ken Gray at David Chrysler-Jeep at the Airport Automall, said Chrysler's match of the $4,500 federal rebate has been hugely popular. "Double Cash for Clunkers" signs are taped throughout the showroom, which was teeming with customers after the program resumed.
"I knew the first billion dollars would go rapidly," Gray said, "and we've had a lot of people coming in here asking about it.
"They haven't stopped coming."