New-car sales registered in Maryland last month reached 25,251, several hundred less than a year earlier despite the wildly popular "Cash for Clunkers" program, according to figures from the Maryland Motor Vehicle Administration
Yet some dealers say they are happy with the clunker program, especially now that the government is finally reimbursing them for cash incentives they gave upfront to buyers.
"It worked very well. We sold 20 percent more cars than we did the year before," said Ed Dreiband, president of Northwest Honda and Northwest BMW in Owings Mills.
The Car Allowance Rebate System, better known as "Cash for Clunkers," awarded $3,500 or $4,500 to consumers turning in gas-guzzlers for new fuel-efficient models. The program that kicked off in late July unleashed a pent-up demand, and the government quickly stepped in to increase the funding to a total of $3 billion. When the program closed a month later, nearly 700,000 clunkers were turned in and dealers had submitted about $2.88 billion in claims.
Nationally, the program is credited for boosting retail sales in August at a rate not seen in more than three years.
According to the MVA, the 25,251 new-car sales registered in Maryland last month totaled $651.2 million. That was 2,415 more vehicles than in July, when new-car sales totaled $602 million.
But even with the clunker program, August figures are still down from a year earlier, when 25,666 new-car sales worth nearly $663.4 million were registered here.
Peter Kitzmiller, president of the Maryland Automobile Dealers Association, says the MVA numbers don't reflect the true impact of the clunker program because they track only vehicles registered in the state. "Maryland dealers sold a ton of cars to people in other states," he says.
And car sales, which started sliding after the market plunge last fall, would have been a lot worse in August without the program, Kitzmiller says. "It's a strong month in a very, very bad year," he says.
The government recently increased the number of workers processing reimbursements, which has sped up payments to dealers after a slow start.
Three weeks ago, about 3 percent of Maryland dealers' claims were paid and cash flows were strained, Kitzmiller says. Now, about 50 percent of claims have been paid, and most of the rest should be paid by the end of the month, Kitzmiller says.
Antwerpen Automotive Group in Catonsville saw sales rise 23 percent in August. The government has reimbursed 48.5 percent of Antwerpen's claims, but the dealer is still waiting on $2.7 million, says Nikki Hilton, marketing director. Antwerpen isn't stressed by the delay in reimbursements, Hilton said.
"We definitely want our money ... but there hasn't been any panic," she said.
Dreiband, who paid out $410,000 in incentives during the clunker program, expects to have all but 10 percent of that by the end of this week. And he's optimistic that sales for the rest of this year will be better than a year ago.
"Last November, I was looking at which tree I could hang myself on," Dreiband says.
