Cash for Clunkers
In keeping with one of our goals to save money and spend more wisely, have you heard about Cash for Clunkers? If you have been thinking about a new car check it out:
The federal government finally released the rules that dealers and their customers have to follow to participate in the much-discussed “cash for clunkers” program, which can provide consumers with up to $4,500 when they trade in an older vehicle and buy a newer, more fuel-efficient model from a participating dealer.
Anwyl also notes that the rules are fiendishly complicated. Much of that is a result of the government’s effort to prevent fraud. For instance, the program requires trade-ins to be junked, and the rules include elaborate procedures that dealers must follow to permanently disable the engines of clunker trade-ins so they can’t be resold. (Part of the idea behind the law was to get older, less-fuel-efficient vehicles off the road.)
Shoppers may also be in for some frustration, above and beyond the tight restrictions they need to meet to qualify (read on for details on how the program works). For example, buyers must show proof of one year’s insurance — which would be recorded on their policy but may not be reflected on the insurance card they carry in their wallet.
Consumers should also be wary of official-looking clunkers websites that have sprung up, many of them asking for personal information. The official government website for the programs is www.cars.gov. The government has also set up a hotline at (866) 227-7891.
Kelley Blue Book (www.kbb.com) and Edmunds.com offer online calculators to help buyers decide whether a particular deal makes sense under the clunkers program.
Here are some questions and answers about the program.
How do I know if my trade-in vehicle is eligible for the program?
It must have been manufactured in 1984 or later and have a combined city-highway fuel economy rated at 18 miles per gallon or less. The program is advantageous only if the trade-in value is less than the minimum $3,500 offered by the government.
Can the credit be applied to any new vehicle?
All imports and domestics with a list price under $45,000 are eligible, as long as they meet fuel economy standards of at least 22 mpg for cars; 18 mpg for SUVs, small pickups and minivans; and 15 mpg for large vans and trucks. The new vehicle’s fuel economy must exceed the trade-in’s by at least 4 mpg for cars, 2 mpg for SUVs and 1 mpg for large trucks to qualify for the $3,500 rebate. The full $4,500 rebate kicks in at an increase of 10 mpg, 5 mpg and 2 mpg, respectively.
Remember, the mileage numbers are based on combined city-highway driving mileage as measured by the federal government — not the mileage you actually get. The fuel economy numbers can be found at www.fueleconomy.gov.
What happens to the clunkers after the trade-in? Can they be resold?
The Car Allowance Rebate System requires that the trade-in be crushed or shredded so that it will not be resold. The wrecking yard is allowed to salvage some parts for resale, excluding the engine and drivetrain.
Can I game the system by going to a junkyard and buying a wreck to use as a trade-in?
No, the program requires the vehicle be in drivable condition, continuously insured and registered to the same owner for at least a year before the trade-in.
I have several clunkers in my garage. Can I trade them all in?
There is a limit of one trade-in per owner under the program, with the credit applying to the lease or purchase of a single new vehicle.
How long does the program last?
Until Nov. 1 or until the $1 billion is spent, whichever comes first.
http://www.latimes.com/business/la-fi-clunkers25-2009jul25,0,4520824.story
With a failing economy this may not be the time to think about purchasing a new car. How, ever if you have been saving because yours has been dying a slow death and you knew this day was coming then this may be the perfect time. A few more tips.
Do your homework: 1. Research cars online and narrow your car choices to one or two. 2. Call around to dealerships and find out what they have on the lot. This is the time of the year they are trying to move the 2009 models because the 2010 are showing up. A dealership with several of the model you are looking for may be more open to negotiating. 3. Decide the features you must have such as automatic transmission or four doors and them be flexible. Color should not matter. Don’t get sucked into making cosmetic changes. 4. Check out the calculators online to determine the amount of money you will receive from the Cash for Clunkers program. 5. Get all offers in writing and take them with you to the next dealership. Then take the lowest offer back to the dealership most convenient to your home, for service, or the dealership your felt was most honest and reputable and ask them to match it. If you have credit for a purchase through a credit card do not reveal that until the purchase price is finalized.
This program is only available until November 1st or until the program runs out of money so if you are thinking or using it begin your research now.
Have a question? Such as…
Q: How will this program affect other dealer and manufacturer incentives?
A: Dealers must use the rebate in addition to — instead of as a substitute for — other rebates and discounts available to consumers. Many automakers are combining internal incentives with the government rebates to lure customers to showrooms. For example, Chrysler is offering $4,500 in cash toward the purchase of a new vehicle. Dealers are also required to disclose the best estimate of the salvage value of each vehicle. Check out some answers at: http://seattletimes.nwsource.com/html/businesstechnology/2009534636_clunkers25.html?syndication=rss
Good luck.
Check this out to determine if your car is eligible : http://www.kbb.com/kbb/cash-for-clunkers/?r=661113317006269300
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Our local news ran a story on this last night. Apparently about 75 models have been removed from the approved list, so due diligence must be used.
Also, a couple of junk yard owners have voiced concerns over junking the entire car. They have no problem with making the engine unusable but lament that all the parts are being destroyed – such as doors, trunk lids, grilles, hoods. So there may be a shortage of used parts available for those who do not or cannot for financial reasons trade in their cars.