Hyundai Smartly Launches Cash for Clunkers Ahead of Government

Final details about the federal government's new Cash-for-Clunkers program--clunkily and officially titled the "Car Allowance Rebate System"--won't be released until July 23, but that hasn't stopped Hyundai (HYMLF.PK) from getting a jump on the competition. Hoping to ride the wave of great publicity it's received for its Car of the Year award, its successful Assurance Program, and its recent gas-price guarantee, Hyundai has backed its dealers with short-term cash advances so they can begin issuing the $3,500 - $4,500 credits for clunker swaps.

Apparently, it's working: the company had its first Cash-for-Clunkers trade-in when Katherine Michon of Arlington, Virginia exchanged her 1995 Ford Explorer (F) (15mpg) for a Hyundai Elantra Touring (26mpg).

This early launch is a smart move for Hyundai. The company offers a number of vehicles under the $20k threshold, which should play well among the demographic who've clung to their clunkers. Also, with 13 models that qualify for the program, Hyundai has a fair degree of variety to offer customers. Plus, it puts Hyundai ahead of other automakers, who may not start their promotions for another three weeks.

The only potential drawback? If the rules handed down on July 23 don't match up with Hyundai's expectations, the company could end up eating some of these cash advances. That's not likely, and it's probably outweighed by all the media coverage the company's receiving in the interim, but it's a possibility.

[PRNewswire]

Comments

[sfb61:]

I have been to two Hyundai dealers in the Dallas area and neither of them are aware that they are able to start taking in the "cash for clunkers". They are missing a chance to make a sell before everyone else starts the program.

Jul 05 06:52 PM

[karenc:]

If your car doesn't qualify for a voucher, you can stil donate car to charity and get a tax deduction.

Jul 06 02:22 PM

[Mad Hedge F...:]

Toyota is making a killing. Perhaps it was the newspaper gene in me that made me screech my car to a halt when I saw a near riot in progress at my local total Toyota dealer. The showroom was more jammed than the unemployment office, with eager salesmen recalled from vacations manning card tables set up in every available space. I managed to grab one peripatetic salesman by a lapel, who gushed that they sold 45 cars yesterday, compared to ten for a normal Friday, and that 35 of these were due to the Cash for Clunkers program. Sure I could get a $4,500 credit for my 1995 BMW (17 mpg), and apply it to a new Prius (50 mpg), taking the price down to $19,500 and the monthly payment to $450/month for five years. In fact, the government stimulus program was so successful, that it ran out of money in the first four days, and congress rushed to triple it to $3 billion on Friday. It was like the survivors of a ship torpedoed at sea were swimming frantically for the only piece of wreckage that floated. Assuming that the average car drives 10,000 miles a year, and the average swap generates a mileage improvement from 15 mpg to 27 mpg, junking 750,000 clunkers will save 30 million barrels of crude a year, 1.5 days of our total annual consumption, or three days of imports. I asked to see the cars that were traded in and was told that the lots for the dealer, the used cars, and the detailer were all full, but I could see some if I went to the Target nearby where they were renting extra spaces. There I saw the fleet condemned to clunkerdom, GM Safari’s, Jeep Cherokees, Buick Regals, Dodge Ram pickup trucks and vans, and Chrysler minivans by the dozen, all with “CFC” marked on their windshields, a certain death sentence. These sorry excuses for transportation will never belch blue smoke, nor drip oil on our interstates again. I can’t imagine a sorrier commentary on the management failure of the US car industry for the last 30 years.

Aug 01 04:33 PM