Cash for Clunkers

BUYER BEWARE OF WHAT YOU ARE SIGNING!

All consumer participants in the Cash for Clunkers program need to be aware of what they are signing.  A specific example is do not sign a “Waiver of Liability” that if the NHTSA rejects the trade transaction, the dealership is not responsible for returning your vehicle in pre-trade-in condition.  In the Cash for Clunkers transaction the dealership is responsible for rendering your trade-in’s engine inoperable or having your vehicle crushed.  If the dealership does this before the NHTSA approves your transaction and for some reason the transaction is not approved your collateral (your vehicle) is now destroyed.  Make sure that if the NHTSA rejects the transaction or your loan is rejected that you will get your car back in pre-trade-in condition or the dealer gives you cash equal to the value of your trade-in.

Another issue to be aware of is to insure the dealership is using the proper data to evaluate the MPG rating for your trade-in.  There is only one official table that is to be used for figuring MPG ratings and that is at http://www.fueleconomy.gov/feg/findacar.htm.  Do not allow the dealership to use anything else.  This is the only table that the NHTSA will use!

Also see my hubpage at http://hubpages.com/t/ab49b.

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.

Kelley’s video explaining the Cash for Clunkers program is available below.

GM Plan Approved Will Strenghten Cash for Clunker Sales

Working through the weekend, Judge Robert Gerber announced his approval of the proposed GM Bankruptcy Plan yesterday.  With this announcement, consumers may feel better about purchasing a GM car with their Cash for Clunkers rebate monies.  According to Judge Robert Gerber the plan was the only way to preserve GM’s business.  The plan will now allow GM to create a new company minus a truckload of debt.

According to Brian Pasch, CEO of the Pasch Consulting Group:

“From data collected on www.cashforclunkersfacts.com, Chevrolet cars and trucks are the 4th most popular brand on consumers minds who qualify for a Car Allowance Rebate System (CARS).  Consumer feedback shows that interest in GM vehicles will increase once the public has knowledge that their bankruptcy plan approval.  The news may settle some fears that the company would not be able to stand behind a new car that a consumer would purchase starting July 24, 2009.”

GM Bankruptcy Press Release

Here is the full press release as posted on the GM media website.  Download GM Press Release

NEW YORK – General Motors achieved another milestone in its reinvention last night when Judge Robert E. Gerber of the U.S. Bankruptcy Court for the Southern District of New York approved the sale of substantially all of General Motors Corporation’s assets to NGMCO, Inc., an entity funded by the U.S. Department of the Treasury. In connection with the closing of the sale transaction, NGMCO, Inc. will change its name to General Motors Company and continue to operate under GM’s historic corporate and sub brands.  The approval marks another step toward the launch of an independent new GM.

The new company will acquire GM’s strongest operations and will have a competitive operating cost structure, partly as a result of recent agreements with the United Auto Workers (UAW) and Canadian Auto Workers (CAW).

The new GM will have lower leverage and a stronger balance sheet, which when combined with a lower break-even point, will allow it to reduce its risk, operate profitably at much lower volume levels, and to reinvest in the business in the key areas of advanced technology and product development.  GM’s subsidiaries outside the United States will be acquired by the new company and are expected to continue to operate without interruption.

The new GM will be headquartered in Detroit and will be led by Fritz Henderson as president and chief executive officer and Edward E. Whitacre, Jr. as chairman of the board of directors.

“A healthy domestic auto industry remains vital to the global economy and we deeply appreciate the support the U.S., Canadian and Ontario governments and taxpayers have given GM, and the sacrifices that have been made by so many.  This has been an especially challenging period, and we’ve had to make very difficult decisions to address some of the issues that have plagued our business for decades.  Now it’s our responsibility to fix this business and place the company on a clear path to success without delay,” said Henderson.

The new GM’s common stock will be owned by:

· U.S. Department of the Treasury: 60.8 percent

· UAW Retiree Medical Benefits Trust: 17.5 percent

· Canada and Ontario governments: 11.7 percent

· The old GM: 10 percent

Additionally, the old GM and the UAW Retiree Medical Benefits Trust will hold warrants that are exercisable for 15 percent and 2.5 percent of the interests in the new GM, respectively.

The UAW Retiree Medical Benefits Trust and the Canadian government each may nominate one member to serve on the board of the new GM. The retiree benefits trust has selected seasoned auto industry analyst Stephen Girsky. Also selected to serve on the board of directors of the new GM are six current members of the General Motors Corporation board, including Erroll Davis, Neville Isdell, Kent Kresa, Philip Laskawy, Kathryn Marinello and Fritz Henderson. The Canadian government representative and four additional board members to be identified by the U.S. Treasury will be announced at a later date.

Judge Gerber’s order includes a four-day stay before closing of the sale can occur.  However, GM expects the sale to close in the near future.  The new GM’s business is expected to be immediately operational and fully competitive, with an exciting line of new products, a smaller, more focused brand portfolio and the rationalization of its dealer network well underway.  Current GM employees will be offered positions by the new company.

In connection with the closing, the current General Motors Corporation will change its name to Motors Liquidation Company.  Retained assets will be wound down or sold.  A new board of directors will oversee that process and the liquidation of the company under the supervision of the Bankruptcy Court.

From cashforclunkersfacts.com.

Consumers Should Wait Until July 24.

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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Acura Vehicles Qualify For New Government Purchase Program

Following the announcement that President Obama signed the newly enacted Consumer Assistance to Recycle and Save (CARS) program, three Acura luxury vehicle models are expected to qualify for government credit vouchers under the stimulus program. The CARS program, also known as “Cash for Clunkers,” is a government subsidy that encourages drivers to purchase a new, more fuel-efficient vehicle to replace an older, less fuel-efficient vehicle.

Under the CARS program, government vouchers will be issued to participating dealers for $3,500 or $4,500 (the amount depends on the difference in fuel economy between the older vehicle replaced versus the new model purchased) for new vehicles purchased by qualifying customers. Acura vehicles likely to qualify for government vouchers are the 2009-2010 TSX four-cylinder sports sedan, the turbocharged RDX crossover SUV, and certain models of the 2010 MDX luxury sport utility vehicle that will become available later this year.

In addition to offering top tier luxury and safety, Acura vehicles employ numerous technologies that promote clean, efficient power which is the core objective of the CARS program. An example of such technology, all Acura engines employ VTEC® (Variable Valve Timing and Lift Electronic Control) valvetrain timing and a Drive-by-Wire™ throttle system that team to help generate excellent power and fuel efficiency. In addition to delivering good

2009 Acura TXS may qualitfy for Cash for Clunkers

fuel efficiency, all Acura engines comply with the latest EPA TIER 2-BIN 5 and CARB LEV II ULEV emissions standards.

In addition to excellent fuel efficiency, Acura prides itself on exceptional safety as evidenced by recently becoming the first (and only) vehicle manufacturer to simultaneously receive 5-star crash safety ratings from NHTSA* and Top Safety Pick from IIHS for every vehicle in its lineup. The NHTSA 5-star crash safety rating and IIHS “GOOD” ratings are a direct result of Acura’s “Safety Through Innovation” initiative that is based on the brand’s commitment to leadership in safety.

The Acura brand also ranked first in overall luxury brand residual value in the Automotive Lease Guide (ALG) 2009 Residual Value Awards. According to ALG, Acura’s line of luxury performance vehicles is expected to retain the highest percentage of its purchase price after a traditional three-year lease.

Acura offers a full line of technologically advanced performance luxury vehicles through a network of 270 dealers within the United States. The 2009 Acura lineup features five distinctive models including the RL luxury performance sedan, the TL performance luxury sedan, the TSX sports sedan, the turbocharged RDX crossover SUV and the award-winning MDX luxury sport utility vehicle.

From www.hondanews.com 06/29/2009 – Torrance, CA

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.”

CASH FOR CLUNKERS PLAN PASSED BY CONGRESS!

Thursday, June 18, 2009,  Associated Press

A summary of the plan passed by Congress to provide consumers with rebates of up to $4,500 to turn in their gas-guzzling cars and trucks for more fuel-efficient vehicles.

_The $1 billion program is authorized from July through November. It is expected to be implemented by early August.

_Passenger car owners could receive a voucher worth $3,500 if they traded in a passenger car getting 18 miles per gallon or less for a new car getting at least 22 mpg.

_Owners of SUVs, pickup trucks or minivans that get 18 mpg or less could receive a voucher for $3,500 if their new SUV, truck or minivan gets at least 2 miles per gallon more than their old vehicle.

_Passenger car owners could get a voucher for $4,500 if they traded in a passenger car getting 18 mpg or less for a new car that is 10 mpg higher than the old car.

_SUV, pickup truck or minivan owners who get 18 mpg or less could receive a voucher for $4,500 if the mileage of the new truck or SUV is at least 5 mpg higher than the older vehicle.

_Large trucks (pickup trucks and vans weighing 6,000-8,500 pounds) with mileage of at least 15 mpg would be eligible for vouchers of $3,500 to $4,500.

_Participating dealers can access electronic vouchers from the government for consumers to purchase or lease qualifying vehicles.

_Dealers are directed to ensure that older vehicles are crushed or shredded to get the clunkers off the road.

_The program is aimed at replacing older vehicles, so it would not make financial sense for consumers owning an older car with a trade-in value greater than $3,500 or $4,500.

_Older trade-in vehicles must be in drivable condition, be manufactured in model year 1984 or later and be continuously insured and registered to the same owner for at least one year immediately prior to trade-in.

_The new vehicle must have a manufacturer’s suggested retail price of less than $45,000.

BY TODD SPANGLER • FREE PRESS WASHINGTON STAFF • JUNE 17, 2009

Cash for Clunkers voted delayed in Senate until Thursday 6-18-09.

WASHINGTON – A $1-billion cash-for-clunkers program – and the $106 billion war spending measure it’s attached to – will have to wait another day for a final vote in the U.S. Senate.

Just hours after Sen. Judd Gregg, a New Hampshire Republican, denounced the inclusion of the cash-for-clunkers amendment as “unfunded baggage” on the war spending bill this evening, Senate Majority Leader Harry Reid delayed a vote until Thursday.

The House has already approved the legislation, which includes the provision to spur car sales by providing credits of up to $4,500 to people who trade in older-model, lower-mileage vehicles for new, higher-mileage ones. Originally authorized as a $4-billion program, appropriators whittled that down to $1 billion – or approximately enough to put 250,000 new cars on the road.

If the Senate approves it, the measure will go to President Barack Obama for his signature. Then the National Highway Traffic Safety Administration will have 30 days to put regulations in place for the program which – under the war spending provision – will expire on Nov. 1.