"Cash For Clunkers" Bill is a Clunker

So the “Cash for Clunkers” bill passed today, making dealers and shoppers alike all aflutter with anticipation. But wait until you read the fine print. Yes, it is true that the bill can provide you up to $4500, in voucher form, towards the purchase of a new car (has to be new) and a dealership that has registered to be a “Cash for Clunkers” dealership. That already sounds a little bit shady to me. But that’s not the fine print. The used car that you are trading in has to be worth less that $4500 and newer than 1984 in order to be eligible. Again a question arises in my mind—who determines the final value of the vehicle? The owner? The dealer? KBB? Actually KBB’s site doesn’t go back farther than 1989, so it can’t be them. Feels a little too subjective for my liking at this point.

In the FAQ section on the site (http://www.cashforclunkers.com) one of the questions is, ‘How do I find a dealer…” and they direct the shopper to a lead generation form at the left side of the page (which doesn’t work by the way unless you put your phone number in as XXX-XXX-XXXX, but doesn’t actually tell you that, you just have to mess with it, so first instinct is—-BROKEN). I have been selling dealer marketing for years and years…and I smell a money scheme here now. Who’s profiting off all those leads that are being sold? Dealer’s are clambering for new car leads right now, and for the most part, can’t sell more than 8% of the ones that they have. One would think, these are pretty high quality leads, so what are dealer’s willing to spend on them? $20? (the average) $50? $100? Is the money made off of selling the leads to the dealers going back to pay for the program or just going into some special interest group’s pocket? Ooooh, and now ads are being served on the site for participating dealers, the terribly ugly and unprofessional looking site. The site also lists a number of dealerships (still franchise stores) that can help that unfortunate customer that $4500 still won’t get into a new car because of credit. This is screaming really bad marketing campaign…looks, feels, smells, like a money making scheme from someone new to the online automotive marketing arena, and dealers are falling for it.

I say run for the hills!