“Cash For Clunkers” IS a Clunker!

We haven’t seen many car commercials in a while (…which is not helping my efforts to get a raise!) but a new kind of ad has emerged on the airwaves touting the “Cash for Clunkers” program. More formally known as the Car Allowance Rebate System (CARS), the $1 billion federal program starts today in an effort to get people to off-load their ‘clunkers’ in exchange for new fuel efficient vehicles. 

Basically, you hand over your ride and the government gives you $3,500 to $4,500 as a discount to a new lease or purchase. The idea is to put some fuel into auto sales (…and the economy). Sounds great huh? Admittedly, I started thinking about trading in my car when I heard about this “deal.” That is, until I remembered that my car is only a few years old and gets outstanding gas mileage…but hey, if its new and shiny…who wouldn’t want a new set of wheels?! 

Not everyone is so enthused however… 

The Wall Street Journal says this initiative IS a clunker! Writer Evan Newmark makes these points:

  1. The program is designed to help U.S. automakers who’ve already absorbed over $100 BILLION of your tax dollars.
  2. The program is too small to make a dent. Initially, it was designed to be quadruple its current size however, Congress backed off when they saw the price tag.
  3. Its $1 billion funding will only cover about 250,000 new cars…less than 3% of current US auto production.
  4. The CARS legislation lowered the mileage requirements for GM, Chrysler and Ford who sell those big ol’ SUVs and trucks (wait…wasn’t this whole thing about getting smaller more fuel efficient cars??!!).
  5. Buyers get a rebate when the new ride has a whopping 4 mpg. But get this…if you buy one of those big box cars, you get the rebate so long as it gets just one measly extra mile per gallon….WOW…Mother Earth takes a huge sigh of relief! 

Cars.gov is the government’s website that outlines the details:

  • Your vehicle must be less than 25 years old on the trade-in date.
  • Only purchase or lease of new vehicles qualify.
  • Generally, trade-in vehicles must get 18 or less MPG (some very large pick-up trucks and cargo vans have different requirements).
  • Trade-in vehicles must be registered and insured continuously for the full year preceding the trade-in.
  • You don’t need a voucher, dealers will apply a credit at purchase.
  • Program runs through Nov 1, 2009 or when the funds are exhausted, whichever comes first.
  • The program requires the scrapping of your eligible trade-in vehicle, and that the dealer disclose to you an estimate of the scrap value of your trade-in. The scrap value, however minimal, will be in addition to the rebate, and not in place of the rebate.

CashForClunkersFacts.com provided a list of frequently asked questions about the bill.

You can check if it qualifies on FuelEconomy.gov.

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3 Comments

  1. Hello. Thank you for this great info! Keep up the good job!

  2. thank you! I really liked this post!

  3. thank you! I really liked this post!


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