Used-Car Sales Taken for a Ride by Cash for Clunkers

Washington DC July 31, 2009; The AIADA newsletter reported that used-vehicle sales are hitching a ride on the Cash for Clunkers bandwagon, some dealers say. But others caution that the program will hurt the used-vehicle market down the road.

According to Automotive News, some consumers – lured into new-car dealerships by a government check for $3,500 or $4,500 for trading in their car or truck for a new, more fuel-efficient one – are realizing that their vehicles don't qualify for the government program, and are instead driving away in a used vehicle.

At Gee Automotive Cos. in Spokane, Wash., CEO Ryan Gee says his dealerships have seen a spike in traffic because of the program. For every customer who purchased a new vehicle under the program, another whose vehicle didn't qualify purchased a used vehicle instead.

Adam Simms, owner of Toyota Sunnyvale in Sunnyvale, Calif., says his new-car sales are strong thanks to the federal government program. He tells Automotive News that he expects to sell about 190 used vehicles in July, which would be his best used-vehicle sales month ever.