AUTOMOTIVE NEWS

Don't qualify for clunker program? Have they got a deal for you!Diana T. Kurylko

Automotive News -- August 6, 2009 - 3:41 pm ET

A group of more than 60 dealers is trying to lure buyers who don't quality for the government's cash-for-clunker program by jointly marketing and funding their own incentive program.
The dealers have launched autostimulusplan.com, committing to incentives between $500 and $4,500 for both used and new cars.

The dealer program is less restrictive than the government's. For example, it allows shorter leases than the 60-month minimum required by the clunkers plan, and there's no limit on the price of the new vehicle; the government program sets a $45,000 cap.

A qualifying trade-in must be a 2006 model or older and must have been owned by and registered to the same person for six months. The dealer program requires a buyer to purchase a replacement vehicle with 2 mpg better fuel economy.

The rebate is a maximum of $4,500, based on a credit above the average trade-in value set by three guides: Kelley Blue Book, Black Book and the NADA Official Used Car Guide. Any replacement vehicle that gets 2 mpg or better is eligible for a 10 percent trade-in bonus; a replacement vehicle that gets 5 mpg or better is eligible for a 20 percent incentive above the trade-in value.

Program details will vary depending on state regulations, says Sean Wolfington, co-founder of Level 5 Advertising in Dulles, Va., which created the campaign and Web site.

Wolfington says the group won't post a list of participating dealers. Interested consumers are asked to fill out a form at autostimulusplan.com. That information is forwarded to as many as three nearby participating dealers. Some dealers don't want the publicity "because they don't want the government to think they are working against them and have that affect their reimbursements," Wolfington says.

The largest dealership group to announce its participation is the Rick Case Automotive Group in Florida, which has 16 dealerships in Ohio, Georgia and Florida. CEO Rick Case says: "The combination of cash for clunkers and the automotive stimulus plan is going to give us a huge, huge August.

"It will help used cars and especially leases because Honda is the only company that has a 60-month lease. None of the others qualify under the [government] program."

Wolfington says other dealers are in major markets throughout the country.

Dealers have committed varying amounts to their program. The auto stimulus plan group says participating dealership groups have each committed to spending between $500,000 and $5 million on the program.

Vince Sheehy, president of Sheehy Auto Stores Inc., of Fairfax, Va, says he's offering additional incentives of $1,500 to $2,000 off the purchase or lease price, but the amount could change depending on how long the government program is extended. Sheehy has 23 franchises at 14 locations. "This is a very fluid situation with cash for clunkers. Our push has been let's see where we are going and then we will adjust our marketing program.

"Had cash for clunkers been suspended, we would have moved into this next program. We are still scrambling," Sheehy says.

Brian Benstock, general manager of Paragon Honda and Acura in New York, says the program addresses buyers left out of the government program -- especially those who can't afford a new car. "I don't want people to think that only if you have a clunker you have a deal," Benstock says.

Benstock says he's committed $1 million.

The group says its plan will run through Nov. 1. The program was originally slated to begin on Aug. 15 but was pushed ahead because of the "instability of the government program," the dealers say.

Benstock says the dealers also are hoping to increase their stock of used cars because, unlike the government program, they won't scrap trade-in clunkers.

"With new car sales off, there is no used-car inventory to turn back into the market," Benstock says. "Prices at the auction are going up, and used-car customers can't find reasonable prices."

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