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Now closed, the Cash for Clunkers Program allowed you to trade in your old car for a new one, get better gas milage, and get up to $4,500.
Cash for Clunkers, CARS Program Closed Monday, August 24
The Cash for Clunkers program came to an end on Monday, August 24.
Cash for Clunkers, Brief but Bright
On Thursday, June 25, 2009, President Obama signed into law the Cash-for-Clunkers bill, now called the Car Allowance Rebate System (C.A.R.S.).
The Cash for Clunkers program has been so succssful that it used up the original $1 billion dollars alloted to it. That money was intended to last until November. It lasted six days.
The House of Representatives and the Senate passed a new bill extending the C.A.R.S. program and funding it with an additonal $2 billion.
The popularity of the program has been a boon to car dealers, manufacturers, and other segments of the economy. It's poplularity is also why it's coming to an end much sooner than expected.
Cash for Your Clunker
The National Highway Traffic Safety Administration is managing the program that will pay consumers up to $4,500 in credit for trading in their cars or trucks for new vehicles that are more fuel efficient.
Supporters of the bill hope to stimulate car sales and to help the environment by taking old, inefficient vehicles off of the road. The auto industry is looking for any incentives after months of poor auto sales. This program aims to generate about 1 million new auto sales, and draw its funding from the Troubled Asset Relief Program (TARP).
Want to Trade in Your Old Car?
As the C.A.R.S. website explains, there are some important details you need to know.
- 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.
Consumers Bill of Rights
- Qualified consumers will receive a credit of $3,500 or $4,500 for an eligible trade-in toward the purchase of lease of an approved vehicle under CARS Program.
- Qualified consumers will receive the $3,500 or $4,500 credit at the time the purchase their new vehicle.
- Dealers must provide consumers with any other advertised rebates or discounts in addition to the credit they receive through the CARS Program.
- Consumers should expect to conduct their deals at their dealership of choice, not on the Internet.
- Consumers should expect the dealers to provide their best estimate of the scrap value for their eligible trade-in vehicle. Dealers are allowed to deduct $50 from this value for their administrative costs.
- Consumers should expect that all information collected through the CARS Program will be kept confidential. Social Security members are not required for a CARS transaction.
For more information, call the C.A.R.S. hotline: 866-CAR-7891 or visit the C.A.R.S. website.
The Better the Mileage, the Better the Deal
Car owners can get a voucher worth $3,500 if they trade in a vehicle getting 18 miles per gallon or less for one getting 22 miles per gallon or more. Consumers could receive $4,500 if the mileage of the new car is 10 mpg higher than the old vehicle. Owners of sport utility vehicles, pickup trucks, or minivans that get 18 mpg or less could receive a voucher for $3,500 if their new truck or SUV is at least 2 mpg higher than their old vehicle. The voucher would increase to $4,500 if the mileage of the new truck or SUV is at least 5 mpg higher than the older vehicle. The credit cannot be applied toward a used vehicle or toward new vehicles that cost more than $45,000. Consumers could also receive vouchers for leased vehicles.
Find out what gas mileage your vehicle gets at the FuelEconomy.gov website.
Be Careful!
Don't trade in your vehicle unless its value is less than or equal to what you'd get in the program. Edmunds has compiled a handy list of cars (PDF) that are worth less than the value of the voucher.
The National Highway Transportation Safety Administration, the organization set to oversee the Cash for Clunkers program, is warning of fraudulent Web sites. The NHTSA says that a number of unofficial Cash for Clunkers sites have popped up recently with some offering to help consumers and dealers alike pre-register for vouchers.
A Good, but Limited, Idea
If you have an old car that's worth less than $3,500 to $4,500, that's less than 25 years old, and gets less than 18 MPG - and you are ready to buy a new car, not a used one, then this program is perfect for you. You will save money. As critics have said, those are difficult parameters in a recession.
American automakers could benefit less from this program than foreign brands. Only eight of the 48 models that Consumer Reports recommends buying under the program are domestic: five from Ford, three from General Motors and none from Chrysler.
Some environmentalists oppose the bill because it takes functioning cars off of the road before their full value has been utilized. Moreover, this bill does not permit the vouchers to go towards used vehicles, even if they are more fuel-efficient. Sen. Dianne Feinstein, who sponsored an alternate bill stated that the current version undermines fuel efficiency standards and provides "handouts for Hummers."
As with other recent legislation, such financial reform and climate change bills, the art of compromise is leaving those at both ends of the arguments grumbling.
Related articles
- Cash For Clunkers Program - Consumer FAQ
- Cash For Clunkers Program - Dealer FAQ
- Cash for Clunkers Program - Avoid and Report Fraud
