April 1, 2009 at 1:00 am

Auto dealers hope incentives attract buyers

Car lot owners say confidence, financing needed for sales boost

Dean E. Sellers, general manager at Dean Sellers Ford in Troy, says he hopes Congress will make a decision soon on the proposed cash-for-clunkers rebates. (John T. Greilick / The Detroit News)

Payment protection for new car owners. Cash vouchers for consumers who "buy American." And government-backing of General Motors Corp. and Chrysler LLC vehicle warranties.

These incentives and others unveiled by Detroit's carmakers and the federal government could help inject some much-needed consumer confidence into the nation's ailing auto industry, say dealers and customers browsing Metro Detroit showrooms Tuesday.

Still, some dealers question whether the impact will be great enough to reverse steep sales declines and a deepening recession that's cast a pall of uncertainty over the consumer market.

On Tuesday, Ford Motor Co. and GM announced they would cover monthly auto payments for new vehicle buyers in the event they lose their jobs.

The Obama administration announced Monday that customers who buy a new GM or Chrysler vehicle while the companies are restructuring will get government-backed warrantees, which the U.S. Treasury will guarantee if either fails.

Meanwhile, Congress is considering a bill that would give car buyers who replace older, less fuel-efficient vehicles a $5,000 cash voucher for buying cars assembled domestically.

"The problem is people are a little skittish now about making a commitment, and these incentives are going to help calm their nerves," said Ronald MacEachern, general manager of Saturn of Troy, a part of the Suburban Collection dealership chain.

Right now, the dealerships faces two issues: customers who want to buy new cars but aren't able to secure financing and a lack of confidence in GM warrantees, MacEachern said.

The government's plans to back those warrantees was like "a big shot in the arm" for soothing consumer jitters, MacEachern said. He added that he's looking forward to April sales figures, hoping the incentives will help them rebound from March results, which were off by 20 percent.

"I think it's going to be a good month," MacEachern added.

Dean E. Sellers, general manager at Dean Sellers Ford in Troy, said Ford's new payment-protection offer has already lured one wary customer into his showroom. He believes it will help entice other prospective buyers who have been holding off because of employment concerns.

Sellers said he hoped the government would make a decision soon about offering cash vouchers for American vehicle purchases because it's causing some would-be car buyers to delay purchases.

"That's creating pent-up demand because they're waiting for the federal government," he said.

Alan Helfman, vice president of Helfman River Oaks Chrysler Jeep in Houston, said business in Texas' largest city hasn't been as bad as elsewhere in the country, but admitted the government's help in backing GM and Chrysler products is welcomed.

"It's not utopia, but we're doing all right given the economy," said Helfman, who also operates separate Dodge and Ford dealerships. "But this is like the best guarantee of all, straight from the U.S. government."

Helfman said the biggest problem for many prospective buyers is a lack of available credit, something he's hoping government intervention will also help change in the coming weeks and months.

For Carol Carr, 62, the cash-for-clunkers program being considered by Congress would be well-timed because she's looking to trade in her 16-year-old Honda Accord for an American-built car.

On Tuesday, she browsed the lot of Sellers' Ford dealership on Troy's Motor Mile, eyeing the Ford Focus.

"Clearly, we have a clunker," she said, noting that the talk of the new incentive program was a factor in getting her out to the showroom that afternoon.

cvrogers@detnews.com">cvrogers@detnews.com (313) 222-2300 Nathan Hurst contributed.