Hot off the press from www.cars.gov!! The Cash for Clunkers program is still in operation. Get to your dealer immediately if you plan to participate. The additional $2 billion appropriated and approved by the House must pass a senate vote next week and there will be a fight over the additional money.
Cash for Clunkers Back on the Road
A review of the CASH FOR CLUNKERS BILL
Posted on July 10, 2009 by jtgartner
Curious exactly how the Cash for Clunkers bill works? This handy chart and fact sheet provide all you need to know about trading in a beater Isuzu for a shiny new car.
At first, a look at the chart gives the impression there’s a lot of money to be made by trading in your old car for a new one. Unfortunately, the compromises in this bill make it unlikely many people will be able to utilize it and save a great deal. There are two factors working against making this a worthwhile proposition and they both have to do with the logic of the bill.
First of all, operable vehicles are required and there aren’t many people driving around with vehicles worth less than $1,500. Many old crappy cars, in fact, can still demand up to $2,500 on the open market. This means you’re going to get, max, $2000 for your trade-in. The least valuable qualifying cars, of course, are actually the more efficient compact vehicles, which makes getting the necessary 10 MPG improvement unlikely.
The second problem, stemming from the first, is quantifying the number of people who actually drive around in cars worth less than $2,500 and can actually afford a new car. Instinct tells us there aren’t many people. This means people taking advantage of the program will, typically, have to be excited by the prospect of saving $1,000 or $2,000. These people should already have been swayed by intense discounting from automakers in recent months.
This isn’t to say there aren’t people who won’t be able to get money from the program because, say, they have an old light duty truck and have been meaning to trade up to a newer car for a while. But the greatest number taking advantage of this deal may be people who can afford a new car and have, for one reason or another, decided not to buy one. These people will likely be lured in by dealers combining the $4,500 voucher with $2,000 in additional savings for big numbers like “$6,500 off a new Focus” that ignore the actual original value of the trade-in.
This is a warning to any car dealer that gives a consumer the CARS credit on a new car sale before July 24. Mr Dealer you run the risk of complicating your reimbursement process in the Cars for Clunkers rebate program. See what is posted on the NHTSA website.
Here is the exact wording placed in the official CARS website, http://cars.gov:
“While the CARS Act makes transactions on and after July 1 potentially eligible for credits under the CARS program, interested dealers and consumers may want to wait until all of the detailed issues that must be addressed in the implementing regulations are resolved and the final rule is issued. Issuance will occur around July 23.
At that point, NHTSA will have in place detailed provisions about establishing eligibility and a system to ensure the prompt payment of money for credits used under the CARS program.
If dealer choose to structure a transaction before the final rule is issued, they will bear the risksassociated with later demonstrating that the transaction meets all of the specifications of the final rule. The dealers should also give the credit to the consumer at the time of such transaction.
The dealer would be reimbursed by NHTSA later if the dealer registers and submits documentation sufficient to demonstrate that the transaction was an eligible one, that the traded in vehicle was properly disposed of, and that all requirements in the final rule were met.”
This is an excerpt from a PDF document from the official CARS website.
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The Car Allowance Rebate System (CARS), the system administering the cash vouchers approved by the House and Senate will probably to be signed by President Obama on Weds, June 24. The program implementation looks to begin in late July and run through Nov 1, 2009.
The Federal government website (http://cars.gov) announced that the program would begin “late July”.
It is noteworthy that the language in the bill stated the program was to start July 1?
This new start date does compress the period of the program to just 3 months.
Car Allowance Rebate System (CARS) - Cash for Clunkers
There Is No Need To Pre-Register for the Cash Allowance Rebate System (CARS)
Please be aware that there are some websites promoting pre-registration:
“There are a number of people out there who are implying that dealers and/or consumers need to register with them to be eligible for the CARS program,” DOT spokesman Rae Tyson reveals, leaving aside questions about what these sites may do with the information. “This is completely untrue.”
Tyson said that cars.gov is the only official DOT CARS website. He also said his agency is working with car manufacturers and dealer associations to contact all state-registered dealers and promote the program to consumers.
Tyson went on to say, “If you’re a consumer, there is no need to pre-register with anyone. If you’re a dealer, we will contact you as and when the program is initiated.”