President Barack Obama is expected to sign the "Cash for Clunkers" bill within days. Officially known as the Cash Allowance Rebate System, the program could pay you to take a larger, older, less fuel efficient vehicle off the road, have it destroyed, and replaced by a new vehicle.
Congress Passes "Cash for Clunkers" Bill
(AP) Car shoppers could take advantage of government incentives worth up to $4,500 this summer to send their old gas guzzler to the scrap heap in favor of a more fuel-efficient new vehicle.
President Barack Obama is expected to sign into law the "cash for clunkers" program, which was approved by the Senate on Thursday. For owners of low-mileage models such as the 1994 Ford Bronco, 1998 Nissan Pathfinder or the 1995 Chevrolet Blazer, the plan could give them a reason to visit their local car dealer during an economic downturn.
"I've been sitting on the fence for about a year," said Jim Seegraves, 44, of East Lansing, Mich., who has been looking to replace his 2000 GMC Sierra pickup truck. "This legislation will help me get over the hump and get the car that I want."
The bill provides $1 billion for the auto sales program from July through November and the Congressional Budget Office expects that with a total of $4 billion, about 1 million new vehicles could be purchased. The government is expected to implement the program by early August.
Automakers and their unions have lobbied heavily for the incentives to help the auto industry boost sales and stabilize General Motors Corp. and Chrysler Group LLC, which have received billions of dollars for government-led bankruptcies. In May, U.S. auto sales were 34 percent lower than a year ago and the industry expects to sell less than 10 million vehicles in the U.S. in 2009, compared to more than 16 million in 2007.
|
Buffalo's Early News and WBEN.com looked at the program in-depth Wednesday morning and offers these resources.
How the Plan Works
Related Resources & Links
Questions & Answers
Exclusive WBEN Audio
Click Below To Listen
WBEN's Barbara Burns
with car dealers
WBEN's Dave Debo
with Cong. Chris Lee
On the Liveline with.....
Here's how the plan works:
The program was aimed at replacing older vehicles - built in model year 1984 or later - and would not make financial sense for someone owning a vehicle with a trade-in value greater than $3,500 or $4,500.
A 1998 Jeep Cherokee 4-wheel-drive with about 150,000 miles, for example, might only get $1,000 to $1,500 as a trade-in vehicle, according to estimates by Kelley Blue Book. Since the 1998 Cherokee gets about 17 mpg, an owner could parlay it into a new Ford Escape Hybrid - 2009 versions get 28-to-32 mpg - and maximize their trade-in to $4,500.
Dealers would apply the vouchers to the purchase or lease of a qualifying vehicle and ensure that the older vehicles are crushed or shredded. The new vehicle can be U.S. or foreign-built and must have a manufacturer's suggested retail price of less than $45,000.
The program is not without critics.
Jeremy Anwyl, chief executive of Edmunds.com, a Web site for car shoppers, said it would struggle to provide 250,000 new vehicle sales. Most of the qualifying vehicles would be at least 10 years old and many owners would be less inclined to take on a new car payment or unable to afford a new vehicle.
"You've got to consider the profile of consumers who drive these vehicles," Anwyl said.
Dealers say it will be a valuable tool to lure more shoppers to their showrooms. Many intend to advertise heavily and combine the government plan with other incentives, providing some help at a time when the industry is struggling to sell cars.
"Anything to jump-start the economy," said Jason Robinson, a car salesman with AutoServ of Tilton, N.H. "There's not much sense of urgency out in the market right now."
What do you think?
Is the "cash for clunkers" program practical for you?
Click here to share your comments on the plan.
Questions And Answers
What could it pay me?
- 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.
How will it work?
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.
Does it make financial sense for me? Do I qualify?
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.
Other Resources
Lauren Fix, an automotive speaker, author and editor often heard on WBEN is a critic of the Cash For Clunkers program. Lauren has agreed to answer listener questions about whether you qualify for the progam, or if it is a good deal for your individual circumstances.
To reach her visit laurenfix.com or click here.
from Cars.gov, The NHTSA's "Cash for Clunkers" info site.
The Cash Allowance Rebate System
Your vehicle must be less than 25 years old . Only purchase or lease of new vehicles qualify. Trade-in vehicles must get 18 or less MPG (some very large pick-up trucks and vans have different requirements) Trade-in vehicles must be registered and insured continuously for the full year preceding the trade. You don't need a voucher, dealers will apply a credit at purchase
Related Links: from cars.gov
What is the Car Allowance Rebate System?
Do I need to get a voucher or sign up for this program?
How do I know if a dealer is participating in the program?
How do I know if my car or truck is an eligible trade-in vehicle?
How do I find out when my vehicle was manufactured?
How do I find out the combined city/highway fuel economy rating of my trade-in vehicle?
Does the program apply if I want to lease a vehicle, or must I purchase a vehicle?
Is there a cap on the price of the vehicle I can buy or lease under the program?
Does the program apply if I want to buy a used car?
| What is the amount of the credit?
In addition to the credit, will I get the full value of my trade-in vehicle?
I don’t drive an American car but I would like to trade in my old car for a newer, more fuel efficient one. Is this program only for American cars?
I have a truck and I cannot find its fuel economy rating. Is it an eligible trade-in vehicle?
I just traded in my old car for a new vehicle last month. Will I get some money back?
Toll Free: 800.616.WBEN
E-Mail Story
Print Story
Coast to Coast with George Noory
