Telegraph Herald - Dubuque, IA


 
Sunday, November 8, 2009
Dealers defend Cash for Clunkers
The program came under fire over fuel efficiency in an AP analysis, but that focused on just a small fraction of the deals.

POTOSI, Wis. -- Dan Grass says the miles per gallon on his 1993 Ford F-150 were dropping fast.

"I had it forever and would have kept it forever, but the mileage was plain dropping off," said Grass, of Potosi, noting that he was only getting 11 miles per gallon pulling an eight-horse trailer.

Through the Cash for Clunkers program, Grass purchased a 2009 Ford F-150. His new four-wheel drive truck gets 14 miles per gallon when he's hauling the trailer and 17 miles per gallon on the road.

Trade-ins like Grass' came under scrutiny last week in an Associated Press analysis that reported that Ford F-150 trade-ins were the most common swap and that the fuel efficiency benefit of those deals was minimal.

The AP said exchanges of the trucks for new models happened more than 8,200 times and represented an improvement of "just 1 mpg to 3 mpg over the clunkers."

The report, which dubbed the federal program "marginally successful," is disputed by some area auto dealers, an area legislator and Grass.

"I wouldn't have done it if I was only going to get one mile per gallon different," Grass said.

He said he needed another truck for hauling and his new vehicle has a more powerful engine. In a letter to the editor, Grass said that the exchange seemed like a no-brainer.

The Associated Press analysis, which was based on data the news agency obtained through the Freedom of Information Act, noted that the government spent $562,500 in rebates for new cars and trucks that got worse or the same mileage as the trade-ins.

The report also noted some of the specific cases that "raise eyebrows" -- like deals in nine states in which owners cashed in old trucks for between $3,500 and $4,500 tax rebates toward new Hummer H3 SUVs.

But those deals represented a fraction of the $3 billion federal program, which induced 677,081 trade-ins.

And the AP report came under fire from at least one publication that posted an editorial saying it missed the point.

"Do a little math. Those 8,200 F-150 trades are barely more than 1 percent of the total. 'Scores of deals' suggests about one-tenth of 1 percent," said the Paris Post-Intelligencer of Tennessee.

"Deeper in the AP report is the statistic that the average fuel economy in clunker trades was 15.8 miles per gallon for the old vehicles and 24.9 mpg for the new ones -- better than a 50 percent gain. That sounds to us like more of a story than reporting that a small percentage of deals didn't help the environment."

Rep. Bruce Braley, D-Iowa, contends that most economists have called the program wildly successful.

"(The AP report) also ignored the fact that 3,000 workers in Lordstown, Ohio, kept their jobs because of the program. I purchased a car from Cash for Clunkers from Lordstown, Ohio. Those workers would strongly disagree with the AP story," Braley said.

And tri-state area dealers expressed mostly positive reviews of the Cash for Clunkers program.

"I think it was an absolute success," said Doug Warthan, owner of the Kruse-Warthan Dubuque Auto Plaza.

Of the 100-some cars Warthan said his dealership sold through the program, the vast majority improved mileage by 10 miles per gallon or more. Warthan added that he didn't think the dealership sold one full-size truck through the program.

"The cars people were trading in were very poor in fuel mileage; most of them weren't road-worthy," Warthan said.

Mike Finnin, owner of Mike Finnin Motors of Dubuque, said from the dealership point of view, the program was "great," although the cost could be questioned.

"Is it a good thing for the dealers? Yes. For the people who bought a vehicle? Yes. As a stimulus program. Yes? A good thing for the American taxpayer? That I think you'd have to question," Finnin said.

Finnin said his dealership also sold close to 100 cars through the program, and he felt its fuel efficiency goals were reached.

Warthan said his main difficulty with the program was the slow reimbursement from the government, which ended up totaling "several hundred thousand dollars" for his company.

"We finally did get paid, which we were thankful for," he said. "When (payments) started to come through, they came through in a hurry."

Finnin agreed that payment was slow.

"It was a typical government program. It was a nightmare, but they did get us paid. The intent was there, but the execution was awfully weak," he said.

TH staff writer Michael Schmidt contributed.


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