Cash for Clunkers Rules Released

New Government Program Offers Cash For Trade-Ins

Jul 24, 2009 Ryan Gamble

The new cash for clunkers rules outline the method by which car owners can trade in gas-guzzling vehicles and receive a credit towards the purchase of a new car.

The U.S. Government has passed an assistance program that is being called the 'cash for clunkers' plan. The official name of the program is the Consumer Assistance to Recycle and Save Act of 2009, but 'cash for clunkers' has become an adopted name of sorts for those dealing with the procedures of the act. The name being used to represent the Act by Government agencies is currently the Car Allowance Rebate System (CARS). The basis of the act is to help consumers attain more fuel efficient vehicles by providing a cash credit for a low MPG vehicle that they would trade in at the purchase.

Cash for Clunkers Purpose

As laid out in the Consumer Assistance to Recycle and Save Act of 2009, the Department of Transportation views the program as a way to convince consumers to trade in a less fuel efficient car or truck and receive a tangible benefit for doing so. The act is outlined here and could potentially be a very large wind-fall for some consumers that take advantage of the program. An example of someone that could come out ahead under the cash for clunkers stipulations, could be someone with a SUV that has over 100,000 miles and doesn't receive very good gas mileage. Under the program, an owner could turn in the car for possibly more than it is currently worth, and put that trade in value towards the down payment of a new, and more fuel efficient vehicle.

Cash for Clunkers Incentives under the Car Allowance Rebate System

The biggest cash for clunkers incentive that consumers can reap from this Act is assigned trade in value. The incentives are slated at $3,500 or $4,500 depending on the new car that is being purchased in conjunction. It's a sliding scale, with the bigger difference between the current MPG rating, and the future MPG rating of the new car taking into account. This leaves the consumer with the thought as to whether or not the $3,500 or $4,500 is worth more than the typical trade in value would be for a car of their year, make, and model.

Cash for Clunkers Rules

There are several cash for clunkers rules that come in to play when the trade in value is being measured. Not everyone will qualify for the trade in assessment, so it is advantageous to read through the cash for clunkers rules to gain the best understanding possible of their nuances.

The first main cash for clunkers rule is that the vehicle cannot be more than 25 years old. Think of this as the 1984 rule; meaning that any vehicle newer than that will work under the Recycle and Save Act if the other rules are also met.

The second cash for clunkers rule deals with the MPG rated value of the car, and where it sits on the gallon combined fuel economy as rated by the Environmental Protection Agency. All vehicles that get less than 18 MPG under this framework qualify for the program, with some exceptions that include large trucks or cargo vans as outlined in the rebate system.

The other stipulations that are included in the Car Allowance Rebate System are that the trade-in can only be used towards the purchase of a new car, that the vehicle must have been owned by the consumer for at least a full year before taking advantage of the program, and that the vehicle is scrapped by the dealer after the transaction is closed.

Cash for Clunkers Credit Amount

If the new vehicle gets at least 4 more MPG than the trade-in, but less than 10 MPG of improvement, the credit is $3,500 for the consumer. If the new car gets more than 10 MPG more than the trade-in vehicle, then the cash for clunkers credit is $4,500.

Cash for Clunkers Duration

The cash for clunkers program is going to run from July 1st, 2009 to November 1st, 2009, giving a lengthy opportunity for consumers to seek out dealers interested in using this program. Those who made a trade-in that qualifies under the program earlier in July can still qualify for the rebate and should inquire with their dealer on how to make that happen.

Car Allowance Rebate System Web-Site

There is a web-site set up to offer more information about the cash for clunkers program located at www.cars.gov which also provides cash for clunkers dealers that will be looking to also take advantage of this program.

Sources:

1. Consumer Assistance to Recycle and Save Act of 2009

2. Car Allowance Rebate System (CARS) Web-Site

Additional Ways To Take Advantage of Cash For Clunkers Program

The copyright of the article Cash for Clunkers Rules Released in American Affairs is owned by Ryan Gamble. Permission to republish Cash for Clunkers Rules Released in print or online must be granted by the author in writing.

Low MPG Vehicles can now be traded in with benefit

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Comments

Aug 7, 2009 9:12 PM

Guest :

It is my strong opinion that this cash for clunkers will only work for people who can afford to buy a new car to begin with, By giving the incentive of x amount of dollars off the price of a new vehicle, as long as it doesnt TOTAL COST OF OVER 15,000.00 And considering that the "increased" fuel economy goal is only by 1 mpg to 10 mpg I see this whole venture as INANE, AND EXTREMELY WASTEFUL. If the vehicles being traded in get as low gas mileage as 15 to 18 mpg, and their new vehicles are expected to perform approximately to the SAME standard, IF WE ARE TO THROW BILLIONS OF DOLLARS AWAY, to increase the lowest car sales in 27 years, why not give those vehicles good homes with people who cannot afford a DECENT CLUNKER?? Myself I drive a V-8, 1995 Thunderbird that gets 24 mpg on the highway and around 20 mpg in town. Yet with Cash for Clunkers, you are speaking of a small sized SUV, or a light duty pickup that perhaps gets only 15 to 18, mpg, and all that has to improve on that is by 1 mile per gallon to 4 miles per gallon to qualify??? WHAT A CROCK., and what a bunch of CROOKS. This is a big waste of money, resources and reuseable recyclables. Any Auto wteckers involved in this would be put through the ringer, the engine runined, he has more work to do to crush the vehicle than he would be paid for recycling it. All toxins and lizuids have to be removed from the vehicles, The engines cannot be parted out to be resold, AND they have to be pulled from the vehicles before crushing. Without resaleable value of ANY SORT, this causes a worse problem than what existed to begin with. If the auto wrecker cruwshed the vehicle for smelting, the most he would make on this is 250.00 YET, there is a fee placed on the dealer of 50 dollars for sending the vehicle to the auto wrecker, they have to pay to the state that will go into a fund for administration? To begin with just about HALF of the money alloted for this program will go to adminmistration to implement it. Not to the dealers, not to the manurfacturers, and not to the consumer. This is another way to screw up our already battered economy, and drive us all deeper and deeper into a bottomless black pit. Considering this started out pushing GREEN vehicles, why didnt this become a factor. Save our enviroment? Gor God sake try saving our Country.

Aug 11, 2009 8:24 AM

Guest :

it sucks that my 1982 truck is to old. it is more a clunker than most of the cars being traded.

2 Comments