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 (OTC:HYMLF) 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 (NYSE: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.