New-car lots don't have a lot of cars

Frank Martelli dialed eight Chrysler-Jeep dealerships in New Jersey and Pennsylvania last week, frantically looking for one that still had a 2009 Jeep Liberty in stock so he could trade in his black 1999 Jeep Cherokee 4X4 Sport under the federal "Cash for Clunkers" program.

He struck out.

"They are all out," said Martelli, 41, a pipe fitter from Cinnaminson. He and his expectant wife, Diane, visited Gary Barbera Chryslerland yesterday in Northeast Philadelphia, to no avail.

Stock had dwindled to fewer than 200 cars by noon - down from 600 around this time in previous years, sales manager Geno Barbera said.

After months of lackluster sales and bankruptcies, automobile dealers find themselves in an unexpected situation: They are running low on cars as buyers take advantage of the Car Allowance Rebate System (CARS), which gives customers a credit of $3,500 or $4,500 for trading in an older vehicle for a new one that has better fuel efficiency.

Dealers are reimbursed for the credits by the National Highway Traffic Safety Administration, which is operating the program.

"Definitely, 'Cash for Clunkers' has accelerated the demand to buy," Barbera said. Minivans and sedans made by Chrysler, which is matching the credit, and Chevy Aveos and Cobalts are in very low supply.

Manufacturers, who had cut back on production late last year and early this year, are accelerating production schedules to accommodate the rebate program.

"I have a shipment coming in all week long, and the week after," said Dino Rucci, general sales manager at Winner Ford of Cherry Hill, where the 2009 Ford Escape, with a base price of $21,645, and the 2010 Ford Fusion, which sells for $20,545, are in high demand.

Rucci began requesting additional orders - about 20 percent more than usual, he said - six months ago with Ford Motor Co. in anticipation of the start of "Cash for Clunkers."

But even his expectations have been exceeded, he said.

To handle the extra customers, he has extended the workday for five managers and a sales staff of 17 by an average of four hours a day since the program began July 24.

Experts say demand generated by the clunkers program may have pushed U.S. auto sales to a 2009 high last month, possibly signaling a bottom in the car-buying market's worst slump since at least 1976.

Sales have run at a seasonally adjusted annual rate of fewer than 10 million vehicles since December. That pace trails last year's total of 13.2 million and the 16.8 million average from 2000 through 2007, according to the U.S. Department of Transportation.

David Kelleher, owner of David Dodge, which has dealerships at the Philadelphia Airport Automall and in Glen Mills, said "Cash for Clunkers" had given many struggling dealers a lifeline.

"I really think it will jump-start the industry," he said. "We were looking at another six months of doldrums. . . . Now it's speeding up our recovery by six months. A lot of guys didn't have that six months in them."

Before David Levine, 42, and Maren Levine, 43, of Devon, drove off in their silver 2010 Toyota Sienna XLE minivan from Conicelli Toyota in Conshohocken yesterday, they emptied their belongings from their clunker - a silver 2001 Chrysler Town and Country LXT minivan with 130,000 miles and a broken air conditioner.

The couple, who went car shopping with their 8-year-old daughter, Hannah, said they were taking no chances when they saw that the Sienna was the last one in the lot by 1 p.m. yesterday. They bought the minivan, with a base price of $32,900, without a test drive. The $3,500 credit took the price down to $29,400.

"Cash for Clunkers" persuaded David Levine to buy a new car instead of a used one, he said, and to buy now rather than wait a month.

"We thought it had run out," he said. "Today, we were elated that the program was still on."

The House on Friday approved adding $2 billion to the program, which besides boosting vehicle sales aims at taking gas-guzzling, environmentally unfriendly cars off the road. In less than a week, buyers' burst of demand exhausted most of the initial $1 billion allocated for the program.

The Senate is likely to take up the measure early this week, officials said.

U.S. auto dealers have been told to resume "Cash for Clunkers" sales on the presumption the $2 billion is on its way.

Conicelli Toyota general sales manager Glenn Beck said a perceived race-against-the-clock mentality among customers fearing the program could run out of money at anytime, and end-of-the-month incentives on top of the $3,500 and $4,500 credits, have created a sense of urgency and caused several dealers to run out of cars on certain models last week - including his employer.

His dealership sold 47 cars last month because of "Cash for Clunkers." It sold 13 cars under the program yesterday.

Beck said the Siennas, RAV4s, Priuses, and Toyota trucks were running out.

"It's a good problem to have," he said. "It's been a fantastic program for the industry and for the customers taking advantage of it."

In general, your clunker must:

Be less than 25 years old.

Get 18 miles per gallon or less.

Be registered and insured for the year preceding trade-in.

Be traded in for the purchase or lease of a new vehicle.

The program runs through Nov. 1, or when funding is exhausted.

For more rules and an m.p.g. guide to your car, go to www.cars.gov

SOURCE: U.S. Department of Transportation

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