Cash for Clunkers is hurting used car dealers - WALB.com, Albany News, Weather, Sports

Cash for Clunkers is hurting used car dealers

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By Christian Jennings - bio | email

CAIRO, GA (WALB) - Business is booming for new car dealers thanks to Cash for Clunkers.

But used car dealers are struggling because of the government incentive program.

Sales have dropped drastically in the last few weeks, and some south Georgia pre-owned vehicle dealers worry the program could put them out of business.

Since Cash for Clunkers began, Hometown Auto Sales in Albany hasn't sold a single car. And yes, they blame the program.

But they aren't the only ones that fault the government for the rapid drop in sales. I spoke with dozens of used car dealers, and they all said the same thing.

Cash for Clunkers is crushing gas guzzling cars across the nation.

But it's also crushing sales for small business owners who make their living on selling old cars.

"I think it's the worst thing we've ever done," said Jerry Frazier, owner of Save-A-Lot Motors in Cairo who's been in business for 11 years. He says Cash for Clunkers has already hurt his business.

Before the program started, he purchased most of his cars from the local new car dealers.

"The cars I normally buy they are now crushing, so my source of cars is drying up," he said.

Down the road at Bill's Pre-owned vehicles, they haven't made a single sale since the program began.

All the traffic, is at the new car dealerships, not his.

"They're giving these incentives, but it's to the new car dealerships, not the independents," said Shurley.

Bill Shurley purchases his cars at used car auctions. This past weekend, he didn't make a single purchase, because he says the price tags were marked too high.

Now he's worried he'll have to mark up his own prices, and in turn, lose even more customers.

"Yea i'm worried I'll go about of business," said Shurley.

Jerry Frazier shares his concern. He also sympathizes his low-income customers who soon may not be able to afford to buy even the cheapest used car, when their guzzlers break down.

"It's positive for the people that can afford to buy a new car anyway, but those aren't the people I thought we were supposed to be helping," said Frazier.

Used car dealers told me that before the program they were actually doing OK. A lot of people were turning to used car dealers for better prices during the tough economy.

But now those new customers they were seeing, are turning away for what many see as a better offer.

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