Consumers get feds' 'cash for clunkers'

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By William Ehart

Consumers are snapping up cars ahead of the new federal "cash for clunkers" program, reserving popular models before inventories run out, auto dealers around the country say.

The Car Allowance Rebate System, or CARS, won't begin paying rebates until Friday. The program offers up to $4,500 to car buyers trading in qualified cars and trucks.

Shoppers are already putting down deposits to hold cars until the program kicks in.

"We've been reserving cars for customers, taking deposits," said Vince Sheehy, owner of 17 dealerships and the largest Ford dealer in the Washington area.

"At our Springfield location, we now have 15 deposits so far, and we think that this thing is going to really bust loose starting [this] week," he said.

Mr. Sheehy sells Fords, Nissans and Subarus in Springfield. He said his other dealerships each have about five cars on hold for customers who put down $500 deposits.

CARS was funded with $1 billion, part of this year's economic-stimulus package to boost car sales and take older, higher-polluting vehicles off the road.

Analysts cautioned that the program's impact will likely be limited once the initial burst of enthusiasm wears off, as the rules are restrictive and consumers are still in hunker-down mode.

But dealers around the country say demand is so high that they expect to run out of certain models well in advance of the plan's Nov. 1 deadline.

"The high-mileage cars are going to be picked over very quickly," said Mitch Morse, co-owner and general manager of Morse Chevrolet in Kansas City, Kan.