While some Alaska auto dealers are embracing a new federal stimulus program that lets customers trade in old gas guzzlers for a $3,500-to-$4,500 reduction in the price of a new fuel-efficient car, most are holding back. They say they do not want to get hung out to dry by the federal government and are telling customers to return at the end of the month when the program's fine print is written.
The Cash for Clunkers program, or Car Allowance Rebate System, was signed into law last month by President Barack Obama and officially started July 1. But auto dealerships, which must file the necessary paperwork on behalf of qualifying customers, can't get any money until the end of the month, after the rules and regulations are finalized.
That hasn't stopped some dealers from jumping on board in hopes the free money will spur depressed sales. Some Alaska dealers have already sold cars under the program, expecting to be reimbursed by the U.S. Department of Transportation. Others are getting the customer's paperwork ready so they are first in line for the funds, but holding onto the keys until approval comes through.
Some manufacturers are eagerly anticipating the program. Hyundai Motor Co., South Korea's largest carmaker, is advancing money to U.S. dealers so they can sell cars immediately to customers taking advantage of the deal, according to media reports.
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Part of the overdrive is a worry that the money allocated to the program, just $1 billion, will run out before it expires on Nov. 1.
"The odds are the consumer that waits will not have the money available for him," said Dave Blewett, president of the Kendall Auto Group, which owns several dealerships in Alaska.
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