The wildly popular program was intended to get inefficient, lower quality cars off the road. A side effect has been a projected increase in used-car values, according to several industry experts.
Buddy Arrington, the owner of Arrington’s Auto Sales and Rental on Deans Bridge Road, said higher prices will mean fewer cars available for lower-income people in search of rides in the $2,000 to $4,000 range.
“A lot of people could’ve bought these cars with $300 down, but they’re not going to be able to do that anymore,” he said.
Also, some of the so-called clunkers were cars that would have been passed down to a child, said Phillip Crouch, the finance manager at Carn Auto Sales on Peach Orchard Road.
The used auto market had already experienced a rise in value because of decreased production. The cars that qualified for the program, which had to be working, tagged and insured for a year, were part of a functioning but lower-end demographic, Mr. Crouch said.
Cash for Clunkers has been wildly successful in spurring new-car sales and getting gas-guzzling models off the road, though some energy experts have said the pollution reduction is too small to be cost-effective.
Customers receive rebates of between $3,500 and $4,500, depending on the improvement in fuel efficiency from their old vehicle to their new one. As of early Friday, nearly half a million cars had been sold through the program.
The government program was expected to result in more than 750,000 clunkers traded in for new cars. The old cars are required by law to be crushed. Clunkers account for about 2 percent of the used car supply, according to a Kelley Blue Book market report.
But the new sales left many dealers worried about not being reimbursed by the government. As of Friday, dealers had been reimbursed for just a small fraction of the billions in sales.
The vehicles seen most in the Cash Allowance Rebate System were 10- to 15-year-old sport utility vehicles and vehicles worth less than the $4,500 or $3,500 the consumer would have received in trade-in, said Alec Gutierrez, the senior market analyst for Kelley Blue Book.
Mr. Gutierrez said used car sales were strong at participating sellers. Buyers flocked to franchise dealerships, said Paul John, the director of membership and education for the Georgia Independent Auto Dealer Association, but they pass ed by some independent sellers.
Still, Mr. Crouch said the program did increase traffic onto car lots.
“It’s brought auto-buying back into the public’s mind,” he said.
Associated Press reports were used in this article.
Reach Sarah Day Owen at (706) 823-3223
