By Larry Carley June 23, 2009
Congress passes plan to encourage car owners to swap older gas guzzlers for new, more fuel efficient vehicles.
The new "Cash for Clunkers" legislation just passed by Congress will allow you to trade in your old gas guzzler for a more fuel efficient new car. So what are you waiting for? Deals like this won't get any sweeter.
The Cash for Clunkers program, which is officially called the Car Allowance Rebate System (CARS) is designed to accomplish two things: to stimulate new car sales (which is essential to turn around the ailing auto industry), and to get rid of older vehicles that use more gas and generate more pollutants. This program will take the clunkers off the road permanently. Vehicles that are traded in under the Cash for Clunkers program will be crushed rather than resold.
Here's the Cash for Clunkers deal:
You can get a $3,500 to $4,500 trade-in for any 1984 or newer vehicle that you have owned for at least one year, provided your old vehicle gets 18 miles per gallon or less (that's a combined EPA city/highway rating) and you can drive it to the dealer.
You can use the trade-in credit to buy any brand new vehicle that has an EPA fuel economy rating of 22 mpg or higher (combined city/highway), and gets at least 4 mpg or better fuel economy than your old vehicle. Also, the new vehicle must cost less than $45,000.
To get the higher $4,500 trade-in voucher, you must purchase a brand new vehicle that gets 10 mpg or better than your old clunker.
Better yet, light-duty trucks (under 6,000 lbs. GVW) and minivans also qualify for this deal, so it's not just for passenger cars. For a truck or minivan to quality for a $3,500 voucher, it must get at least 18 mpg (combined) and provide a 2 mpg or better improvement in fuel economy over your old vehicle. If the new vehicle gets 5 mpg or better than the one you are trading in, you get a $4,500 trade-in voucher.
NOTE: The government trade-in voucher is NOT on top of the trade-in value of the vehicle itself. It is in lieu of the normal trade-in value a new car dealer would have given you for your old vehicle.
So if you have a car or truck that is worth more than $3,500 to $4,500, there's no additional benefit to you with the Cash for Clunkers program. But if your old clunker is worth less than $3,500 to $4,500, the CARS program is a deal of a lifetime!
Be patriotic. Save the auto industry and the economy. Take advantage of the Cash for Clunkers trade-in program while the vouchers last. This is a limited time offer. When the program runs out of money, it's over and you'll have missed the boat. As of this writing, the CARS voucher program is set to start around July 23, and end November 1, 2009.
Here's the link to the official Car Allowance Rebate System (CARS) website with all the details: Cars.gov
Wow! In a little over a week, the Cash for Clunkers program burned through its one billion dollar allocation of funds with the sale of approximately 250,000 new cars. Nobody expected the program to go through so much cash so quickly. But it turned out to be a huge hit with a lot of people.
In spite of some bottlenecks getting the government vouchers approved, the program accomplished something spectacular: it actually helped a lot of average working people, not just a bunch of Wall Street Bankers and wheeler dealers. Cash for Clunkers helped a lot of people get rid of their old cars and trucks, and trade up to newer, cleaner, more fuel efficient vehicles. It helped dealers move a lot of unsold inventory, and it probably saved a lot of auto industry jobs.
Transportation Secretary Ray LaHood said he knew the program was going to be very popular, but had no idea it would be so "wildly popular." New car dealerships that had looked like ghost towns were suddenly crawling with shoppers.
The bad news is that the Cash for Clunkers program will probably be suspended within a few days unless Congress votes to approve additional funds for the Cash for Clunkers program. Supporters are seeking an additional $2 Billion to keep it going.
Ford reported that the Cash for Clunkers program gave the company the first monthly increase in new vehicle sales in over two years.
Hyundai Motor America announced July sales of 45,553 units, a 21 percent increase over last month and 12 percent increase compared with July 2008. This marks the seventh consecutive month of year-over-year retail share gains, and another all-time record retail market share performance. Cash-for-clunkers deals accounted for 22 percent of Hyundai sales.
"The combination of increasing consumer recognition of Hyundai's industry-leading quality, and the incremental stimulus from the Cash for Clunkers program, led to our second-best July ever," said Dave Zuchowski, vice president of national sales, Hyundai Motor America.
The Cash for Clunkers program is having a positive impact across all sectors of the industry. For example, Hyundai Motor Manufacturing Alabama is now increasing production by returning to a five-day work week in July after being on a shortened work week since mid-October. "We hope the Senate will support the additional $2 billion the House has approved," Zuchowski added. "The program is good for the environment, cuts oil dependency, saves consumers money and is good for the economy - and our dealers have a great lineup of vehicles perfect for customers looking for safe and energy-efficient transportation."
The government said 84 percent of the trade-ins were trucks and 59 percent of the new vehicles were passenger cars. New vehicles bought through Cash for Clunkers had an average fuel-efficiency of 24.9 miles per gallon, compared with an average of 15.8 mpg for trade-ins, a 58 percent improvement.
The U.S. Senate approved and sent to the White House on Thursday a $2 billion extension of the "cash for clunkers" autos sales incentive program. This will extend the program until the funds again run out, or until the original November 1st deadline.
Some of the largest U.S. Automotive Retailers in the country created a privately funded stimulus program to provide up to $4500 in incentives for consumers to make it easier for them to get a newer more fuel efficient vehicle. The dealer funded Automotive Stimulus Plan is designed to complement the government's program and to compensate for some of the gaps that do not allow consumers to purchase pre-owned vehicles or choose a short term lease.
"The government program has been fantastic for business but some of our customers have been disappointed because the programs rules left them behind," said Scott Gruwell from Courtesy Chevrolet, one of GM's largest dealers and one of the retailers participating in the Auto Stimulus Plan. "Letting consumers lease a new vehicle or buy a pre-owned vehicle makes it affordable for a lot of people who could not participate otherwise."
"The government's program helps approximately 10% of the market who qualify but the majority of the consumers who want to upgrade into a more fuel efficient vehicle are not eligible for the governments program," said Brian Benstock from Paragon Auto Group, one of the participating dealers in New York City. "Now we have a program that makes it easy for nearly all consumers to get into a newer more fuel efficient vehicle."
The Automotive Stimulus Plan gives consumers up to $4500 in incentives towards the purchase or lease of a new or pre-owned vehicle with a minimum of 2 mpg of improved fuel economy. The car dealer's auto stimulus program will run until November 1st regardless of what happens to the government's Cash for Clunkers program.
To qualify for a cash incentive, a consumer must select a new or pre-owned vehicle with a 2 mpg improvement over their current vehicle. If a consumer does not have a trade, they can participate if they select a vehicle with 2 mpg better than the government's mpg requirement of 17 mpg.
The trade-in vehicle must be 2006 model year or older, it must be driveable, it must have been registered by the current owner for at least 6 months, and it must be traded in for any vehicle that gets at least 2 mpg or better.
For more details about this program, go to AutoStimulusPlan.com.
WoW! That went fast! The $3 billion that Congress approved for the Cash for Clunkers program has been all used up, and the program is scheduled to end Monday, August 24. The stimulus resulted in the sale of 690,114 vehicles. Administration officials said they have reviewed nearly 40 percent of the transactions and have already paid out $145 million to dealers (though most dealers are still waiting to receive their payments from the government).
If you missed the boat, too bad, because administration officials said there are no plans to seek additional funding for the program.
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