As of Friday Jun 19, 2009 5:00pm, the controversial Cash for Clunkers has just passed Congress and is now heading to President Barack Obama for signature as a piece of legislation meant to help get gas guzzlers off U.S. roads and replace them with new, more efficient vehicles. Many say the act is too lenient and is merely being pushed through as a measure to help get Detroit’s unsold inventory off dealer lots.

Called the “Consumer Assistance Recycle and Save Act of 2009″, or more commonly, “Cash for Clunkers,” the $1 billion program will provide a voucher of up to $4,500 (effectively just knocking that much off the price tag — dealers will get electronic payments from the feds) to help offset the cost of new car purchases or leases over the next five months. The cars that you’re limited to must cost no more than $45,000. So that means I can’t trade in my old 1998 Dodge Caravan (MPG rating of 18) for a 2009 Lotus Elise (MPG rating of 26) because the MSRP is too high ($47,500). However, that awesome new 208HP 2009 Mini Cooper S John Cooper Works (MSRP of $29,200) would not only get me the basic $3,500, but it’s combined cycle of 28 MPG (10 more than my current car) will get me an additional $1,000 for a total of $4,500 off the price of the car! Not a bad deal, in my humble opinion. This rebate also works with other rebates from the manufacturer or hybrid car rebates offered from the Federal Government.

So what is going to happen to all these old cars now that they are off the road? Most will have their engines taken out and destroyed (to ensure these “high polution” drivetrains stay off the road). However, miscellaneous parts like doors, bumpers and other non-drivetrain parts will still be around to make sure those cars that are running can be repairs and made roadworthy.

The House bill would go into effect within 30 days of enactment but it is not retroactive for new purchases made earlier this year. For a more complete description of all the applicable situations, see the chart below:

Passenger Car		Light-Duty Truck		Large Light-Duty Truck (6,000-8,500 lbs.)		Work Truck (8,500-15,000 lbs.)
Minimum fuel economy for new vehicle		22 mpg (EPA combined)		18 mpg (EPA combined)		15 mpg (EPA combined)		Not applicable
$3,500 voucher		Mileage improvement of at least 4 mpg.		Mileage improvement of at least 2 mpg.		Mileage improvement of at least 1 mpg or trade-in of a work truck.		Trade-in must be at least pre-2002.
$4,500 voucher		Mileage improvement of at least 10 mpg.		Mileage improvement of at least 5 mpg.		Mileage improvement of at least 2 mpg.		NA
Source: House Committee on Energy and Commerce

Well, after weeks of fretting and worry, dealers are finally upon the June 9th deadline to sell all their inventory off or be stuck with cars they can no longer sell (due to franchise revocation). We reported a number of days ago about a dealer, Pohanka Chrysler-Dodge, that had dozens of cars to be sold before today or they would have to eat the cost of the cars. Well, originally we were in completely support to help them sell of their inventory and try to keep the dealer losses to a minimum. However, a number of days ago Chrysler had brought to the attention of many that they weren’t going to just leave these dealers to suffer. Afterall, there are still over 2000 Chrysler dealers in the USA keeping their franchising. As such, Chrysler’s plan is to help dealers to redistribute these cars to other dealers and help both the old franchises and the current ones.

“We think we can redistribute any vehicles that any dealer wants us to,” spokeswoman Kathy Graham said. “Dealers are not going to be stuck with cars. We have dealerships that want the vehicles.”

Since Chrysler plants have recently stopped production due to the bankruptcy filing, dealers still want and need new cars. As of the end of last month, there were over 44,000 cars. We currently have no estimates left, but this does show a light at the end of the tunnel for dealers looking to unload their extra inventory as well as consumers who are looking for a great deal and want to buy a Chrysler car during this lull in their operations while they go through bankruptcy court.

Don't Let Your Dealer Go Up In Smoke! Protect Your Assets by Going Back to Basics!

Recent reports indicate that there could be as many as 2400 dealers closing due to the GM restructure. Chrysler themselves have said they plan to close around 789 themselves. With more than 100,000 people working for those dealerships, local communities around the country will be hurting due to the loss of employment. However, the demand for new and used cars are still there. The average person who has a car that’s getting old, got into an accident or plain just stopped working still needs to buy a car and with over 3000 dealerships around the country closing, that leaves smaller, independant dealers and big box dealers from other brands in the mix. So what are those dealers going to do to make sure they don’t fall prey to similar circumstances as GM and Chrysler dealers? Here’s a short list to make sure you’re maximizing what you do in this tough time:

1. Talent is plentiful right now. Make sure that you have the best sales staff you can get. Many of the dealers closing has a solid staff that knew what it takes to get someone into a car. Ask around and see if there are any mavericks looking to get out before the axe comes down. If you’re in a small town, perhaps hiring some of the soon-to-be laid-off staff will be a good gesture to those in your community. Ford, GM or Chrysler, we’re all in the same boat. Sometimes helping those less fortunate can be better for business than pushing out that next sale.

2. Make sure your own dealer finances are sustainable in these tough times. Cash is king, especially in a downturn like our current one. If you’re making your money selling used cars, play to that strength and make extra effort to move your used inventory. Look outside your immediate town and look to other parts of your state. A larger population is looking outside even their home states to get great deals on cars in the current economy. If parts and labor are your main source of income, make sure the local community knows that your dealer is the best place to have their cars worked on. Have an open house. Build relationships with your community. It’s hard to find someone to work on your car you can really trust. Sharing some conversation over a hot dog and soda can go a long way to consumer trust.

3. Technology is key! Why spend thousands of dollars on antiquated forms of automobile ads. Pay only for those sources that are bringing in money. EasyAutoSales knows exactly what you’re going through with some sources that charge you thousands of dollars just to be listed on their website. Being smart means only paying for what you need. Listings these days are all but free in most cases. Utilize pay-per-lead systems where available so you’re not throwing money out with no measurable results. Free and premium tools may not make you money (directly), but will save you time and allow you to spend more efforts elsewhere.

The picture at the top of this post is a rare McLaren F1 that recently caught fire and burnt up. It was later found that the car hadn’t been driven in almost 6 months. Cars, like businesses, need to be cared for every day. Even neglecting something for a few months can get your into a drastic posistion. Just like you drive your car every day, drive your business every day. There are a thousand things you can do to make your business more profitable and ensure you’re safe in these tough economic times. The above 3 are important though, albiet basic. Sometimes you need to get back to basics and streamline what you do to ensure you’ll be around.

How desperate are some dealers in this time of crisis? How about half price cars? It may sound silly, but that’s what Pohanka Chrysler-Dodge has to do in the next week to empty out their inventory according to CNN. On June 9, Pohanka’s franchise to sell new Chryslers and Dodges will be terminated, along with those of almost 800 other Chrysler/Dodge/Jeep dealers nationwide. Ray O’Bryhim, the owner,  cannot legally sell any new cars he has left after June 9 — and because the manufacturer is in bankruptcy protection it isn’t obligated to take them back. Hundreds of dealers are in the same place as them. It sounds like some cheap commercial, but EVERY car really must go by the time June 9th comes around. Ever car that isn’t is lost money.

With this said, until June 9th, EasyAutoSales is going to help out Pohanka by displaying a new car for sale that they still must get rid of every day. We’ll even Twitter about it, in hopes the right person may see the car and Ray will get some his inventory out the door! So, let’s start out with the inventory:

Pohanka Chrysler-Dodge Inventory

Remember, Pohanka needs to get rid of their new car inventory. They can still sell used cars after the 9th. So, let’s pick out a first car to feature:
Let’s be honest, the truck is a legend. With a 5.7L Hemi and some healthy design updates, this is one sharp truck and one that can haul anything you can throw at it. Not only does it look good, but sounds pretty sweet too:

So let’s visit Pohanka and see what kind of deal Ray and his team can make for you on this new Dodge Ram 1500.

Food for thought:

Video games have become as culturally pervasive as movies. In 2007, video games generated US$9.5-billion in revenues, while movies took in US$9.6-billion at the box office. Today, players come from both genders, and all age groups and, with the introduction of Nintendo’s Wii, can involve the whole family.

But you’re asking, how is this going to sell me cars? Simply put, driving a car in virtual reality increased how much someone liked that brand of cars. Clearly test drives will excited individuals. However, you can exactly go 120MPH down the back strait of Road Atlanta in an M3 on a regular old test drive. Additionally, it’s hard to borrow a Subaru Impreza WRC to excite someone, especially when they just came to test drive a Outback or a Tribecca. This sort of brand building can only be done through simulators. However, that is apparently enough to get at least 50% of audiences (according to the study) more excited and in turn more likely to buy a car. Additionally, you’re building a relationship with someone that may be more likely to buy again down the road (perhaps even upgrading as their work positions get more important).

Beyond the lab, we see similar promotions from the likes of BMW with the release of their new M3. They had a video game specifically for driving the M3 to get you excited about the brand. Even I have been subjected to this via the Ford F-150 “Raptor” simulator at this years. NADA. I was already a huge fan of the truck, but getting behind the (virtual) wheel of a “Raptor” and running it across a desert in Baja conditions was just the icing on the “I’m Sold” cake.

Source: Financal Post