Clunker Conclusion: Crazy but Powerful

After 12,000 cars sold, 1,600 of them on Friday, the nation’s largest auto dealer decided enough was enough.

After all, AutoNation had an awful lot of paperwork to do to get back the money the government had promised for those 12,000 clunkers consumers had turned in for new, more fuel-efficient vehicles. So the Fort Lauderdale company stopped taking Cash for Clunkers trades at its 239 dealerships on Friday.

But that didn’t stop the company from loving the program, even if it and other dealers are annoyed by the paperwork and worried about getting the money the government has promised them. “The bottom line is the program is a huge success,” said Mark Cannon, AutoNation spokesman. “The program was a grand slam.”

Cash for Clunkers was slated to come to its official end at 8 p.m. today. But the government issued a last-minute reprieve for dealers struggling to file their paperwork. Overwhelming demand crashed the Car Allowance Rebate System’s website, so the government decided to give dealers until August 25 to file paperwork. The last Cash for Clunkers sales, though, still had to be completed by 8 p.m.

And while some dealers were still moving inventory and furiously filing paperwork right up until the end, bigger operators like AutoNation and Penske Automotive Group were happy to shut it down early to get the $3,500 to $4,500 per clunker they had taken in and destroyed.

Penske, a Bloomfield Hills, Michigan, company with hundreds of dealerships, closed down Cash for Clunkers trades Friday and Saturday. “It’s been a great program,” said Penske’s Tony Pordon. “You can’t necessarily meet all the demand that was out there because of the demands for the paperwork. It’s been very good for our dealerships and for our employees, but that being said, it was crazy. I think our accounting offices, our back offices, quite frankly worked their tails off.”

The whole program has been a whirlwind in which the government spent billions and the moribund auto industry sprang to life, at least for a little while.

As of Monday morning, the government had received 625,000 applications for Cash for Clunkers vouchers worth $2.58 billion. By the time all is said and done, the government will have spent $3 billion on the program meant to take gas-guzzlers off the road and turbocharge sales of fuel-efficient cars.

The program was so popular the government had to end it more than two months early for fear of burning through all the money Congress had appropriated for it. GM and Ford, thanks to sales of cars prompted by the program, have called back laid-off workers and increased production at some of their plants.

But the environmentalism of the program was open to question, as this Portfolio.com piece points out. Yes, less fuel-efficient cars were taken off the road. But recyclers took a hit because the most valuable part of the cars traded in, the engines, were destroyed as part of the program.

And now that there’s no $3,500 or $4,500 incentive to head to your local auto lot, will the improved auto sales last, or will the industry just go back in the tank?

Cannon, of AutoNation, is looking on the bright side. “Obviously there will be a slowdown right after the program,” he said. “There will be some drop-off, but we still feel there’s a gradual recovery coming. We believe that’s in place right now.”