After hours of confusion about whether the Cash for Clunkers program had run out of money, it was game on again Friday for car dealers, TV stations and newspapers, who had worried that one of the few bright spots for their industries would end after just one week.
Dealers around the country pondered Friday whether to pull ads for the program, which was supposed to have run until November or until the $1 billion initially set aside ran out. The deal - which gives up to $4,500 for trade-ins if they meet certain conditions - saw so many sales in its first week that the funds were already dwindling.
But the U.S. House moved to approve an additional $2 billion for the program later Friday. While that scenario played out, there was confusion around the country for shoppers, dealers and advertisers.
In Victor, N.Y., Kitty Van Bortel said she was caught in limbo about whether to pull the plug on rebates at the Ford and Subaru dealerships she owns.
"Honestly, in all my years in the car business, I have never seen such a mess. It's just unbelievable," she said Friday morning, saying she was locked into her advertising for the weekend, no matter the outcome.
The auto industry is the nation's biggest advertiser, though it trimmed its first-quarter spending by 28 percent to $2.31 billion from $3.22 billion in the same period last year, according to TNS Media Intelligence.
Dealers cut ad spending far more than manufacturers, dropping ad purchases 49 percent to $643.9 million in the first quarter. Manufacturers trimmed spending by 15.2 percent to $1.67 billion, from $1.96 billion.
Dealers have been hit particularly hard by the auto industry woes, with manufacturers like Chrysler and GM announcing plans to close thousands of dealerships as they look to cut costs and deal with slumping demand.
The Darrow Auto Group was anxious Friday to see if the clunker program would continue. The program has already helped sales at its 20 dealers, said Mike Darrow, executive vice president of the Menomonee Falls, Wis.-based company.
Starting last Friday, the company had already spent $40,000 on two weeks worth of television and radio advertising for the program, which he said was more than what it would spend for a typical promotion because of all the exposure the deal had been getting.
Now with more federal funding likely, it's possible the marketing will increase to keep fueling demand, Darrow said, though he cautioned it may taper off if inventory can't keep up.
"The main thing is we're going to keep it going," he said. "We're going to have to see how the month and the week finishes here. I think Monday morning we're going to have to look at our inventory levels, and see if we need to beef it up."
The increases in advertising are welcome news for the advertising industry, where overall spending has been falling as companies react to cutbacks in consumer spending and limit their own advertising. Newspapers, television and radio stations and other outlets have seen their profits tumble.
The clunkers program won't save the auto industry but it will help sales during what is typically a slow selling time, said Peter DeLorenzo, publisher of autoextremist.com, who formerly worked in marketing and advertising for the auto industry. He said it's likely that dealers who had been holding back on advertising for the program will do so now.
"I think the savvy dealers who were already on top of it will just keep going," he said. "Maybe the dealers who were on the fence and see how this goes will jump in now. But let's see how quickly this next $2 billion goes."
Dealers are prepared to keep pushing.
Why? Customers know their never pay the list price anyway, so there is always a hidden discount, but this was a real number they could focus on, said Al Ries, chairman of Ries & Ries, an Atlanta-based marketing strategy firm. That brings them in the door.
"What opportunity do you ever have to save something like $4,000 or $5,000? That doesn't happen very often," he said.
That's what happened to Emily Cutson, a 29-year-old unemployed graduate in student in Denver. She'd been hoping to replace her 1991 Infiniti in the next year, but heard about the clunker program and decided to get to a dealer before money ran out.
On Wednesday night she traded in her car, which got 16 miles per gallon, for a Honda Civic with 27 miles per gallon. She got $4,500 off the price, paying $17,000.
"I hadn't been looking because I knew I couldn't afford it, and I was going to try to ride out my car as long as possible," she said.