“Cash for Clunkers”–What Is It and How Will It Work
What is CARS?
CARS is a government program intended to help individuals purchase new, more fuel efficient vehicles when they trade in less fuel efficient vehicles.
Why was CARS created?
The program is the result of a joint venture between the struggling auto industry and the emissions hawks to champion a potential victory for both the economy and the environment. The auto industry hoped to get Americans back into dealerships and shopping for cars while the ‘green backers’ hoped for fuel economy improvements and decrease pollution caused by cars.
How will CARS work?
1. Determine if your car qualifies
- Your vehicle must be less than 25 years old on the trade-in date, domestic and foreign vehicles apply.
- Trade in vehicles must get 18 or less MPG. To see if your vehicle qualifies you can visit: http://www.fueleconomy.gov/feg/sbs.htm
- Trade in must be registered and insured to the same owner continuously for the full year preceding the trade-in (proof will be required).
- Work trucks must be from model year 2001 or earlier and the year of manufactured be less than 25 years from the date you trade it in.
- Make sure your car is worth less than the maximum voucher of $4,500 otherwise you loose money on the deal. You will not get the full value of your trade-in vehicle in addition to the credit.
2. If your car qualifies, Shop for a Car
- Can only be applied to the purchase or lease of new vehicles. If you lease a vehicle, the lease must be for at least 5 years.
- The manufacturer’s suggested retail price of the new vehicle cannot exceed $45,000
- If your new car beats the old one at least 10mpg, you get $4,500. If the difference is less than 10 but greater than 4 mpg, the credit is $3,500.
3. Bring title and proof of registration/insurance to dealer
- Papers must show continuous registration and insurance coverage for the past full year, under the same owner (whom must be the buyer).
- You do not need a voucher, the dealer will submit all required information to NHTSA
- If your purchase meets all the requirements, 10 days later NHTSA will issue a financial credit to the dealer which will be used towards your total.
4. Your old car will be destroyed
- The surrendered cars must be scrapped, but parts can be salvaged.
- The engine block must be destroyed.
Reviews of CARS:
- Most vehicles thristy enough to qualify for the program are SUVs or pickups. This means there is no reward for buyers who long ago opted out of the gas-guzzling market or who are willing to trade their small sedan car for a more fuel efficient car.
- It can only be used to buy new cars. In this economy many families that need this incenctive are those who cannot afford a new car, so they loose out of this opportunity.
- Supporters point out that a similar program in Germany sparked car sales and that voucher programs in Texas have proven to work (note: both of these programs are not exactly like the one being passed).