Woman needed car deal, a meal

Don't mess with a hungry woman who wants a bargain.

That's a lesson the sales staff at Findlay Toyota in Henderson learned Friday when they crossed paths with Alison, a local school psychologist who declined to give the Review-Journal her last name.

Alison caught wind of a federal program the Senate approved Thursday to pay consumers up to $4,500 to send their old gas guzzler to the scrap heap in favor of a more fuel-efficient new car. So she stopped by Findlay to discuss trading in her 1997 Ford Explorer, with its 212,000 miles and bad radiator, for a new Toyota Highlander. She would reap big savings on fuel: The Ford gets 15 miles per gallon, while the Highlander gets 27, she said.

There was just one problem: The government rebate doesn't kick in until August, and Alison wanted her deal Friday.

"I haven't had lunch, so this isn't a good time to discuss this," Alison told sales associate Joseph Watkins as she walked out of the dealership. "I'm not going to do this (buy) today, because I want my $4,500. I'll call in two months."

It was the first time a prospective Findlay Toyota buyer attempted to use the coming federal discount as a bargaining chip, said Rich Abajian, the dealership's general manager. Despite the delayed sale, Abajian said he believes the voucher program will rustle up more business for Findlay later in the summer.

"It will all work out for the best," Abajian said. "It will affect a small percentage of our buyers, but it will make a big difference for the people who do buy."

President Barack Obama is expected to sign into law the "cash for clunkers" program. For owners of low-mileage models such as the 1994 Ford Bronco, 1998 Nissan Pathfinder or the 1995 Chevrolet Blazer, the plan could give them a reason to visit their local car dealer during an economic downturn.

Here's how the plan works: Car owners could get a voucher worth $3,500 if they traded in a vehicle getting 18 miles per gallon or less for one getting at least 22 miles per gallon. The voucher would grow to $4,500 if the new car's mileage was 10 miles per gallon higher than that of the old vehicle. That's a significant chunk of change that could serve as a down payment and help buyers obtain financing, Abajian said.

Owners of sport utility vehicles, pickup trucks or minivans getting 18 miles per gallon or less could receive a voucher for $3,500 if their new truck or SUV got at least 2 miles per gallon more than their old vehicle. The voucher would increase to $4,500 if the mileage of the new truck or SUV was at least 5 miles per gallon higher than the older vehicle.

The bill provides $1 billion for the sales program from July through November. The Congressional Budget Office expects that with a total of $4 billion, about 1 million new vehicles could be purchased. The government is expected to implement the program by early August.

Automakers and their unions have lobbied heavily for the incentives to help the auto industry boost sales and stabilize General Motors Corp. and Chrysler Group LLC, which have received billions of dollars for government-led bankruptcies. In May, U.S. auto sales were 34 percent lower than a year ago, and the industry expects to sell less than 10 million vehicles in the U.S. in 2009, compared to more than 16 million in 2007.

Abajian said the program could boost sales at Findlay Toyota by 15 percent, if the results of a similar program in Texas provide any indication. About 20 percent of consumers shopping for a new car today would benefit from the voucher plan, he said.

The program is aimed at replacing older vehicles -- built in model year 1984 or later -- and would not make financial sense for someone owning a vehicle with a trade-in value greater than $3,500 or $4,500.

A 1998 Jeep Cherokee 4-wheel-drive with about 150,000 miles, for example, might only get $1,000 to $1,500 as a trade-in vehicle, according to estimates by Kelley Blue Book. Since the 1998 Cherokee gets about 17 mpg, an owner could parlay it into a new Ford Escape Hybrid -- 2009 versions get 28 to 32 miles per gallon -- and maximize their trade-in to $4,500.

Dealers would apply the vouchers to the purchase or lease of a qualifying vehicle and ensure that the older vehicles are crushed or shredded. The new vehicle can be U.S.- or foreign-built and must have a manufacturer's suggested retail price of less than $45,000.

Walter and Nancy Smith, a husband and wife who live in Henderson, said the program could make sense for them. The two test-drove a Toyota Corolla at Findlay on Friday, and sat down afterward to discuss swapping out their Hyundai Santa Fe SUV for the small sedan. The Hyundai gets 18 miles per gallon in the city, while the Toyota would get 32 miles per gallon, Nancy Smith said.

"Depending on what type of car we buy, it could be worth it," she said. "There would probably be a savings overall. We're thinking about it."

The program is not without critics.

Jeremy Anwyl, chief executive of Edmunds.com, a Web site for car shoppers, said it would struggle to provide 250,000 new vehicle sales. Most of the qualifying vehicles would be at least 10 years old and many owners would be less inclined to take on a new car payment or unable to afford a new vehicle.

"You've got to consider the profile of consumers who drive these vehicles," Anwyl said.

Budget-conscious Republicans in the Senate opposed it, along with environmental-leaning lawmakers who said it failed to encourage the purchase of high-mileage cars and didn't apply to used vehicles. Someone could receive a voucher for buying a new Hummer, they noted, pointing to analysts who said it would primarily benefit owners of older-model pickup trucks, SUVs and minivans.

Dealers say it will be a valuable tool to lure more shoppers to their showrooms. Many intend to advertise heavily and combine the government plan with other incentives, providing some help at a time when the industry is struggling to sell cars.

Findlay executives plan to send letters to long-time customers with older cars, telling them of the coupons. The company will also mention the vouchers in advertising over the summer, Abajian said.

The Associated Press contributed to this report.