Cash for Clunkers Rules Mean Money for Your Gas Guzzler

Did buy a gas guzzler and now regret it after the rise in fuel prices? Are you trying to get rid of it but are having problems because no one else wants your SUV?
If you answered yes then there is a stimulus package for you. The Car Allowance Rebate System is going to buy back your car for $3500 to $4500 in order to help boost the economy. That is, when you buy or lease a new vehicle.

The rules state that your car must be less than 25-years-old, you must be buying a new vehicle, the trade-in must get 18 mpg or less and this must be done before November 1. More info on the rules are are detailed on the Website.

Back in May, car dealerships were closing as GM and Chrysler sent letters to them saying they would not be renewing their contracts. This $1 billion program is hoping to save some of those dealerships. Chrysler is going further to get your car by offering $4,500 and your car doesn't have to meet the government's guidelines.

Congressman Paul Ryan tooted his horn against this program insisting that it means tax payers were essentially buying their neighbors' new cars. Billions have already been committed to the auto industry and the program would just be adding more to that pile of debt.

Anyone who has a car that's 25-years-old probably needs this money. Car payments are a big expense and sometimes put a stranglehold on those that don't make a lot of money. Going to the junkyard and getting parts is cheaper than buying a new car. But, not everyone is that handy. A new car with better mileage might be a better investment.

Even if you love your old gas guzzler, said Joe Taschler in the Milwaukee Journal Sentinel, now might be the time to say good-bye. The "cash for clunkers" rules are scheduled to take effect on Friday. The chance to get at least $3,500 to trade in an old vehicle for a new, more efficient one is "generating considerable buzz among consumers, car dealers and auto industry-watchers."

"Critics say that all of the moving parts of the Obama stimulus plan are barely moving at all," said Linda Stern in Newsweek. But that's not the case with the $1 billion "cash for clunkers" stimulus. "Blink and you might miss" it. "Some hungry dealers have jumped the gun and started offering cash for old gas guzzlers earlier in the month," but the program officially was scheduled to begin July 24 and run for three months.

Here's how the "cash for clunkers" rules work, said Warren Wise in the Charleston, S.C., Post and Courier. "For qualifying vehicles, buyers will get a $3,500 credit for a new car that gets at least 4 mpg more than the trade-in. The credit rises to $4,500 if the new vehicle has a combined fuel economy value that is at least 10 mpg higher than the trade-in vehicle." If it works, nearly 250,000 new vehicles will be on the road when the program expires Nov. 1, and "an equal number of road-weary cars will go to the scrap heap."

That's optimistic, said Robert Samuelson in The Washington Post. The "cash for clunkers" stimulus is "stunted." Macroeconomic Advisers estimates it "might advance a mere 130,000 vehicle sales," which is a far cry from what the Obama administration has promised.

The trouble is that many people who think they can collect tax breaks for their jalopy won't qualify, said Nick Gillespie in Reason. Check for yourself to see if your car qualifies under the "cash for clunkers" rules. The idea behind this program was to reduce pollution from old gas guzzlers while boosting car sales and the economy—instead we'll get another example of the "ineptitude of government."
Car dealers across the country have been waiting to read the final rules drafted by NHTSA lawyers which translate the Cash for Clunkers law into rules and regulations for the NHTSA Car Allowance Rebate System (CARS).

The updated rules have been published on the official CARS program website located at www.cars.gov on Friday morning. Read 136 Page Final Rules

As promised, car dealers can read the rules as well as register for participation in the program online.

We are reviewing the government’s plan to implement the Cash for Clunkers bill and will be reporting our interpretations live on starting on July 24, 2009 at 7:00 am EST.

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