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One of the unintended consequences of the Cash for Clunkers program is that car dealers are so busy that they unable to handle the third party lead generation services that normally send them leads each month.  Two months ago, dealers could not get enough leads to drive sales to their bottom line.

One of the industries largest lead providers to car dealers responding to an inquiry why our lead sales were down responded that car dealers have cut back on buying leads in August.   From our estimates dealers have cut back anywhere from 25-40% of their normal lead spending.

Thousands Of Leads a Day Up In Smoke

For example, our Cash for Clunkers website has over 800 leads a day that can not be placed with new car dealers.  Imagine the thousands of  leads generated by Edmunds.com, Motortrend.com and other popular lead generation websites each day.  All of these leads will become stagnant and cannot be resold under normal contract terms which dictates that leads have to be send to dealers within 30 minutes of being entered into a website form.

It seems that car dealers are flooded with calls and walk-ins that are interested in buying a car under the Cash for Clunkers program and they don’t need extra leads.  I can understand the rationale especially if the dealer is running low on inventory but I would say that turning away leads may not be in their best interest.

Looking Out To September

Not all third party leads result in an immediate sale. Leads that arrive from 3rd parties can represent consumers in the beginning of the sales cycle or at the end of the cycle.  If the CARS program has awakened the consumer to action, it won’t last for very long.  We predict that the total $3 billion will be used up by Labor Day weekend.

Cutting back on lead purchases now may be a result of dealers being exhausted with all the additional paperwork generated from the Cash for Clunkers program.  But in a few weeks that will be gone and dealers who turn away new leads in August will be creating a sales gap in their September and October pipeline.

Slowed Automotive Support Sales

I also imagine that automotive sales support services may be having a tough time getting new clients in August.  Sales professional calling up a dealership in August  to sell them a new tool to convert more sales, increase their time of their website, or to drive more traffic to their website will most likely be told to call back at the end of September.

So its a good time to be selling cars after a horrible past 12 months and probably rough times for the support industry.

Dealers will have to think of new ways to continue the good times this fall is Congress does not inject more money into the Cash for Clunkers program.  That would mean getting back to the basics.

Interesting times indeed.

Chrysler announced today a new progran called “Double CASH For Your Old Car” Incentive Program.

This Chrysler rebates will start on July 23, 2009 and will offer consumers additional incentives that can be combined with the Car Allowance Rebate System (CARS) credit.

For some consumers this can equal up to $9,000 off the MSRP for new cars that qualify for the NHTSA CARS program.

I love this tactic and it raises the bar for manufacturers who want to capture the most eyeballs generated from the Cash for Clunker press.

Hyundai had a great marketing plan by starting Cash for Clunkers sales on July 2, 2009.

The Chrysler marketing plan tops Hyundai because their incentives apply to ALL consumers purchasing a 2009 Chrysler, Dodge or Jeep vehicle.

There are SO MANY consumers who don’t qualify for a CARS rebate and they are angry. Getting $4,500 from Chrysler is giving them the same CASH they would have gotten without all the NHTSA papwerwork and restrictions.

That means any clunker they want to get rid can be tossed to a salvage yard and they can get the salvage cash. They can get up to $4,500 in rebates and get themselves into a new car.

Very clever and perfect timing.

From data collected by the www.cashforclunkersfacts.com consumers have indicated which specific cars they will be trading in for a Cash for Clunkers credit. Ford and Chevrolet vehicles will be the most popular models traded in for a new car purchase under this program as shown by charted data below.

From over 24,000 consumer responses, 4,900 of the consumers (20%) plan to trade in a Ford car or truck for their CARS credit. In second place with 3,458 or 14% of responses are consumers who plan to trade in a Chevrolet car or truck.

When looking at the OEM manufacturers that consumers plan to purchase, it would indicate that Honda and Toyota dealers will benefit the most.

Purchases Planned

Based on 24,000 data points, consumers have also indicated which brands they plan to purchase with their CARS credit. Toyota, Honda, Ford and Chevrolet brands will be clear winners from the $1 billion dollars in funding.

For additional information on the Cash for Clunkers data presented on this page, contact PCG Digital Marketing at 732-450-8200.