What is “Cash for Clunkers”?
We’ve seen a lot of activity lately on Yahoo! Answers and the Forum related to the new “Cash for Clunkers” program. Community members want to know how it works and what the time frame is for taking advantage of the available funds.
The Consumer Assistance to Recycle and Save Act of 2009 was signed by President Obama on June 29. The program it outlines is officially called the Car Allowance Rebate System (CARS) and is designed to help consumers pay for a new, more fuel-efficient car or truck. To qualify for the rebate, you must work with a participating dealer and purchase a new car that is more fuel-efficient than the old one you’re trading in.
The rules are still being determined, but the program should roll out by July 24 and will end November 1, 2009, or whenever the funds run out-whichever comes first. So if you think you’d like to take advantage of this opportunity, you probably shouldn’t wait too long once the program kicks off.
In the meantime, here are some qualifications to keep in mind:
Your trade-in vehicle must have a “new” combined city/highway fuel economy of 18 mpg or less, be in drivable condition, and have been continuously insured and registered to the same owner for the full year preceding the trade-in. It must also have been manufactured less than 25 years before the trade-in date.
Top Contributor Shelby‘s Best Answer offers more in-depth information and step-by-step instructions–check it out here.
Shelby points out that this program is designed to benefit:
*Consumers – provides something tangible and useful in this economic environment
*The economy – supports the automotive industry which plays an important role in the overall health of our economy
*The environment – allows us to get greener faster
*New vehicle dealers – provides a tremendous opportunity to reach out to a huge base of customers
For the most current information, visit the official government site at www.cars.gov. For the official (new) fuel economy ratings, visit www.fueleconomy.gov.
We’d like to send a special shout-out to Shelby for taking the time to provide such a detailed and informative answer to a topic that so many of our community members have been asking about.
Do you have a gas-guzzler that qualifies for this program? Is the rebate enough of an incentive to get you seriously thinking about trading it in? Leave us a comment and let us know what you think of CARS, aka “Cash for Clunkers.” 
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Car dealers are increasing prices for good MPG cars because of the increased demand (artificial) from the cash for clunkers program. Not being critical, but it is basic supply/demand economics.
With the price increases, some markets will will give consumers no net benefit. It is poorly written legislation. Especially since the turned in cars have a trade-in value of equal the scrap metal — because all cars under this program must be taken off the road. So some cars that qualify, may actually be worth more than the redemable voucher.
I don’t qualify for cash for clunkers because my car already gets good gas mileage. But my dad swears by the car buying process here:
http://tinyurl.com/laub3m
great blog
The Cash for Clunkers seems like a good idea for consumers, but from the people that recieve the cars point of view, this is the death of the “junkyard” rebuild as we know it. I work at a small salvage yard based in Iowa, and the restrictions on the cars we recieve for the program are numerous and carry a large fine (around $15,000) if they are broken. Any engines and transmissions in the “clunkers” are to be crushed and no parts can be used off of them. Many of the larger small block, and big block engines fall under this category. As a consumer, this means the availability of the small block 350′s and 400′s is going to greatly diminish, the 383 “stroker” will no longer be a cheap engine to build for you car enthusiasts. So if you enjoy spending around $10,000 for a new crate engine, go ahead. Engine blocks, and transmissions are a large selling point to small salvage yards anywhere. You can ask anyone who runs a salvage yard their opinion, and i would guess they would share mine. Also what i’ve found is that the cash you get back is only good toward a Hybrid car (this may not be completely accurate but is my interpretation of the fine print.) So please before jumping on the band wagon and trading in your car consider all of your options, and make sure you know what you are getting yourself into. Thanks to everyone who has taken the time to read this.
This is a net COST to those that receive the vouchers. A CHEAP new car will cost $10,000. That means the person must come up with at MINIMUM $5,500. Anyone that can afford to put $5,500 toward a car, is NOT driving a car worth less than $4,500.
Also note: The program ends less than 70 days after the rules are determined. This program is designed to SOUND good without helping anyone.
Jaxon is completely correct. I recently went looking for a new vehicle under this program at my local dealer. They are a non-commission, non-negotiation dealer. We looked at one car and asked for some more information, yatta-yatta-yatta, and in their system, that car had a higher price – the window sticker hadn’t been changed yet.
Dealers are absolutely raising prices. It’s a terrible shame that my truck is still in good working condition and would be perfect as a work-style truck that could be banged and dented without remorse. In my case, however, it will be cheaper to buy a new daily driver car and avoid all of the looming repairs. What a waste….
Reality check
Car dealers do not give customers full value for their trade ins, they just up the price of whatever you’re looking at buying.
And the trade in value is based on the scrap price at the crusher? And it has to be drivable?
Why not just drive it over to the crusher yourself and put the money in your own pocket instead of the crooked buzzards’ that are circling over this process, looking for brain deads. It would save spending our taxes on the bureaucracy and skulduggery involved.
Wait a few more years before purchasing a new vehicle, when they’re making ones that truly are low emissions and burns low carbon footprinting fuel (corn based fuel is waaay not). But first we’ll have to throw the bought-n-paid-for lawmakers out of office, and elect reps that give more incentives to alternative energy producers than big oil, before that will ever happen.
If she’s drivable or not, give ol’ Betsy an overhaul, adapt her over to natural gas, and get rid of all that phony bolony emissions crap that is actually poisoning the air and bogging her down. How about giving taxpayers more incentive for doing that, instead of giving it to the buzzards? Or put a For Sale sign on her and get a lot more than crusher price. Or sell her by the part, that’s most likely what they will do with her anyway.
Get real. And give us a break.
Source(s): Been in the auto biz for way longer than the brain deads that will be falling for this crap.
This is another of Obama’s sounds good/doesn’t help anybody waste of taxpayer’s money. There are such stipulations and caveats that almost no one will be able to qualify -and afford a new car. And of course, the cars you can buy will not be American Made!
In the UK “Scrappage” is running, and it isn’t right for everyone. Some will certainly be better buyng second-hand cars conventionally outside the scheme.
It’s worked for me, prompting me to swap a 16-year-old car which I woud have kept for a couple of years more for a new one doing 55mpg combined cycle.
I should get 16 or more years from this one, too,
I get so sick of these programs that are a political smoke screen. Even the television paid programing is outt to use Obama for a sense of satisfaction when losing your home because of a refinance and then a Bankrupcy. I know they are wholesaling these cars somewhere.
Cash for clunkers is nothing more than giving you 4500 to spend 10000 or more to put you in a 4-cylinder coffin that will not get out of the way of a Mac truck to SAVE YOUR LIFE…It’s a scheme to make people believe something is being done besides ruining the whole damn country. When we finally come out of our senses, we’ll be in Bulgaria without knowing how the heck we got there!!!!
As good as it sounds..not everyone qualifies to buy a new car. I own 5 vehicles A 1965 GMC, 1987 blazer 4×4, 2002 Jeep wrangler, 2003 mustang, and a 1997 F-150.
I have to admit it may be more than most people have or want but the whole idea of driving what I feel like driving is more appealing than what the govt demands we drive.
Thjis global warming thing has gotten way out of control..do I believe global warming is occuring..yes..it has been happening for thousands of years before industrialization. who’s to blame for that?
This is nothing more than the govt wanting more control of our lives.
I’m getting sick of everything that has to do with this fake government,especally the last adminstration that no one wants to prosecute for breaking about every law I can think of!!!!!!!!!!!
Really it is gr8 post and too informative as well.
Its amazing how many people on here dont know what they are talking about and just say things with no factual basis.Welcome to the internet where fantasy becomes reality.
I know you can make alot of money scrapping your own car thru a junk dealer and or a private scrap buyer. I was offered only $100 as a trade in on a 96 pontiac grand am Gt loaded.. when the CIA burned my engine out and wouldnt replace my car. I found a scrapper who paid me $2,000 to recycle the parts and such.. Dont think US is collecting junk cars. I think theyre advertising to people who stole cars in which the govt is in conclusion with. they were donated by surviving family members of 9-11–01 and private bus. a a crooked govt employee lied and said theyre FBI budgeted money when it never was . The FBI CIA AND OTHER US GOV claims centers will notpay me im the actual person who the cars were given too. ITs a Scam.. dont apply I want justice not the US scrapping the evidence! Pam Toll Park Forest IL USA
The Cash For Clunkers program is a joke. Our government must think a “clunker” is just a mildly used car that is four or five years old. The information released so far tells us that it is not really a rebate for a “clunkers”, but simply a used car that “miraculously” performs as well as the day it rolled off the assembly line. The trade-in car, the “clunker”, must get a MPG rating of less than 18. But the joke is that they are going to use the published rating of when the car was NEW!!!! Most cars don’t get that rating when they are new and they sure don’t get that when they are 10 or 15 years old and are a real clunker! This plan is just a joke and also is a huge waste of money.
Hey,
It’s “yada-yada-yada”, not “yatta…”.
This program is a joke. Think about it this way. The majority of the cars/trucks that qualify as a trade-in on this program are trucks/minivans/SUVs. Now the owners of these specific vehicles bought them for a purpose — to haul or carry cargo or passengers in them, not the MPG that they have. So, for a person to give this up for a NEW car that they cannot use is really dumb. Let’s face it, the government screwed us on this deal. I understand that you want to stimulate the growth of the auto industry but this is a dumb way to do it.
Take this for example. My wife’s grandmother has to drive a minivan because her daughter has cerebral palsy and can’t get around without a walker or wheelchair. If she needed a new van, she couldn’t afford it any ways. Her van may qualify her to get the full 4400 towards a new car, but why would she do that? She couldn’t afford the payments as she is on SSI, and the new car wouldn’t allow her to carry the necessary things around when they went on a trip or something like that. So, is this helping her? Nope, not at all.
In general terms, this only helps people that have an old car and they can afford a new car payment and full coverage insurance for said car. If they can afford the new car in this economy, I guarantee that they do not need this program.
How can the law be passed, but the “The rules are still being determined”? That sounds like signing a blank check.
Be that as it may. The government is getting into the used car business. They are artificially affecting the used car market by setting a value on used cars. Dealers can’t compete with the government on these cars. To do so, they have to beat the government’s price. So if a dealer sees a future market for a particular clunker, he has to either pay more than the government (which he will recoup when he sells it) OR the car just “doesn’t quite make it to the shredder”. Either way, it doesn’t meet the goal of the law.
Is no way for the clunkers to not get “hijacked” on their way to the shredder? Can opportunistic thieves exchange real clunkers from the junk yard to get shredded in place of the “clunker”? I mean, once the car is shredded, it’s just a hunk of metal. So the government will buy the clunker, pay to have it hauled to shredding locations, pay for the shredding, pay for security and other auditing measures. Just how much is this program gonna cost the taxpayers? Is it worth it?
Couldn’t we all get the same benefit by waiting 10 years and let the used car market take care of itself?
Sounds like another episode of “Congress Gone Wild”
Another scenario is that
This is a scheme to get all the older vehicles off the road. In doing so the OBAMA administration will be able to take over yet another aspect of our once free lives. Beware, the libs are out to get you!!! This is the closest thing we have ever come to a dictatorship in this country. Pray for US…
The purpose of “Cash for Clunkers” is to improve Detroit’s sales figures and reduce the fleet sitting on manufacturer and dealer lots. Oh, and to soak the taxpayer.
You can get the full $4500 credit for scrapping a vehicle which gets as little as 4 MPG less than the replacement. If you scrap an old truck EPA rated at 15 MPG, you can get $4500 off some huge pickup rated at 19 MPG. You can get a car which achieves 29 MPG (cutting 1/3 the fuel consumption of the newer truck) or a hybrid getting 50 MPG (using less than 40% of the fuel of the new truck and less than 1/3 as much as the old) and you get the same $4500. Maybe if you were trading in a worn-out Hummer this would make sense, but not for such trifling improvements.
What this will do is get some people to sign up for new trucks, not because they need new trucks, but because that’s what is getting the manufacturer incentives. Then this low-MPG vehicle will be on the road, sucking up far more fuel than needed for most jobs people have to do, for the next 10-15 years! That’s a long-term subsidy to Exxon-Mobil and OPEC.
If Congress was interested in the health of the country, this subsidy would only be available for vehicles which achieve a 1/3 reduction in fuel consumption over the trade-in, with a mileage floor around 30 MPG. It is quite possible to build a roomy 5-passenger car which beats 30 MPG (I own one, a diesel Passat), but Congress isn’t interested in solving any problem which goes beyond the next election. After that it’s a new problem and they can show just how much they “care” by giving us another half-baked “solution” (which involves even more of our money).
It’s just a mess with this domain name (cars.gov). Not fair play for SEO guys.
Well, just face it! Anything decided by committee
is probably Wrong!
Our Government, took over a Whore House in Nevada for lack of Taxes… Then Lost Money!!
Now it has taken over Banks, GM, Chrysler!
The Government can not be trusted to make decisions upon things that they have a vested interest in! Particularly Whore Houses! LOL!
This is one of the many reasons Obama is a great President.
Thank God Bush is Gone!
This sounds no different than the time I went car shopping, and a dealer convinced me they would write up a ridiculous amount as a “trade in” on my piece of junk vehicle, in order to get me in an “almost new” one with a ridiculous pricetag, and too high interest. This program is designed to help the auto industry sell more cars, and get banks to give more loans. That’s it. I guess it would stimulate the economy though if everyone in a clunker had a fuel efficient new car payment, not to mention the full coverage insurance payments. Too bad there aren’t too many full time jobs available in this economy for folks to afford a car payment, and a mortgage or rent payment. I found out the hard way, if you cannot afford the total cost of whatever car you buy UP FRONT, you will regret it later. Whatever anything you buy for that matter.
This is another useless government program. Your trade-in has to be eight years old, and the voucher replaces trade in value, not in addition to. What do you think the reason people have 8+ year old cars to begin with? Because they can’t afford a new one! And you have to buy a new car as well. 3,500-4,500 isn’t going to help those people purchase a new vehicle. anyway.
More communist policies to beneift Government Motors from a socialist president!
I don’t know if this bill is good or bad, but it may be the only way I can buy a newer vehichle. I currently own a 90′ Nissan pickup that has a million and one small things wrong with it. I’ve owned it for a few years and it’s gotten me from point A to B without complaint, but recently it seems one little thing after another is going wrong with the engine. Problem is I only make slightly over a thousand a month so can’t afford all these repairs. At least with this bill I might be able to trade in for at least a 2000 model with only a couple grand to pay after the trade-in.
The thing they do not tell you about this “solution” is that they must have proof that the car or “clunker” you trade in has been completely destroyed before you can receive any financing on your new car. This means that if your financing deal falls through (this does commonly happen) you are left without a car and…get this…no one can do anything about it. Ask any car dealer who participates and they will tell you this fact…..dealers are even dissuading customers from participating because it is insane and could possibly leave you without a car. Politicians only have their reputation to protect…and while I can’t say they didn’t have YOUR best interests at heart…they still created a faulty program and aren’t going to do anything if you get left without a car in the process!
This program is nothing more than a government attempt to get older vehicles that don’t have the fed’s required surveillance which include GPS, brains that house kill switches and can be pulled after an accident to see what speed you were going, seat belt engagement, etc… among other autocratic measures off the road. Thanks BIG BROTHER!!!
This is an easy way to get $3,500- $4,500 for a car that most likely was going to get traded anyway, but now ur getting a few thousands more for it.
Most people that complaint about the program are the ones that don’t qualify.
I feel sorry for all the people that keep complaining over how dealers are out to get them, I am a car sales man, i sell new chevrolets, n I take pride in what i do, i really take care of my customer, i’ve been doing this for the past 10 years n the only part that i hate about the business is all the people talking bad; sorry u found a thief instead of a decent person.
Not all car salesman are the same… find one u can trust in.
Btw, if u want to know more about cash for clunkers go to http://www.fueleconomy.gov .. the car u are trading in must do 18 MPG combined, and the new vehicle must do better, in this site you can compare your clunker vs the one ur planing on buying; u must have proof of ownership for at least a year, car must be in running conditions and u must have proof of ins for the past year.
If u dont qualify, i’m sorry; not the dealers fault!
18 MPG or less……. sorry.
There are many incentives to keeping a “clunker” – a older car costs less that an engine-control microchip replacement part for a new one, they are simple to understand and repair, no smog tests, and often have a distinctive style and personality you don’t see in current production. If you can hold on to one, after a while it becomes a “Classic” and appreciates.
A good deal for an individual with a cost (pollution) distributed among everyone else. Not quite a rent controlled apartment, but a great way to go if you can spot the cherrys. And now with a price support subsidy.
Besides the problem of your car being eligible, you also have a car you want to buy that gets at least 4 mpg more. That leaves out many of the vehicles left on the lots of the Big 3, which are mostly gas guzzling pickups and SUVs.
I have a car that qualifies, but I can’t afford a new car now. I have way too much debt as it is.
I’ve seen a couple of Smart cars this past week and I would buy one just for going to work, if I could afford it.
How or where do I look for the answer to my question?
The more I read of the actual bill the more I like it. It is NOT the death of the wrecking yard rebuilder engine core’s as some would have you believe as this will only cover a 6 month period (or until funds run out)after the program comes into effect. Also “Dealer Mark Up” aka the price beyond the Manufactorure’s Suggested Retail Price. If one is STUPID enough to pay this they are fools. Besides, this is Bushit. The Government is already going to give $4k for your old 88 Taurus that new got 25 mpg and is now worth $300 period as a trade in. The requirement is only what 15% increase? That means you need to buy a new car that gets 29 miles per gallon. Got a 93 Crown Vic? It got 17 mpg new (on it’s best day) That means 20 is the magic number. Get a New Crown Vic, it qualifies!
I love that this program leaves out classics, which was a big concern in the circles I run in.
As for the new SUV’s vs a 20 year old one. When you get only 10 mpg with that cast iron blocked 454. 12.5 mpg of the new big, bad 8 liter V8 is a 25% increase is fuel ecenomy.
It seems that too many peole are listening to ignorant questions and concerns instead of actually looking at the facts.
Important Things to Know
* Your vehicle must be less than 25 years old on the trade-in date
* Only purchase or lease of new vehicles qualify
* Generally, trade-in vehicles must get 18 or less MPG (some very large pick-up trucks and cargo vans have different requirements)
* Trade-in vehicles must be registered and insured continuously for the full year preceding the trade-in
* You don’t need a voucher, dealers will apply a credit at purchase
* Program runs through Nov 1, 2009 or when the funds are exhausted, whichever comes first.
* The program requires the scrapping of your eligible trade-in vehicle and that the dealer disclose to you an estimate of the scrap value of your trade-in. The scrap value, however minimal, will be in addition to the rebate, and not in place of the rebate.
Check this site frequently for the most recent updates from the government.
12.5 MPG is good? Know what are going to be achieving 13 MPG in a few years? Wal-Mart’s semi-trucks! It is OUTRAGEOUS to accept anything less than 20 MPG from a work truck, or less than 30 MPG from a vehicle used primarily for passengers. More to the point, the nation cannot afford it. We are still sending almost a billion dollars a day out of the country for imported oil, and we cannot survive a bloodletting of this scale much longer.
“Cash for Clunkers” – America be careful with this ad! this is another headache!
It’s over folks … you snooze, you loose. The program will be suspended at mindnight on 7-30-09.
I understand the many misconceptions that this “clunkers bill” has incurred.
I hope to present a few facts for you.
First of all the rebate dollars from this (comparatively small) $1 billion dollar plan are actually going to the people of America. Unlike the previous $103 Billion (bailout) dollars (from US and Canada)which has already been distributed between Chrysler, General Motors, and their suppliers.
(Note: Ford Motor Co. did not accept nor request any bailout money to date)
These rebates are going to fine upstanding citizens of the United States of America in order to help them purchase a new vehicle OF THEIR CHOICE which will get each individual a vehicle that gets better fuel economy than the guzzlers that they were previously driving.
Those “clunkers” that they were driving were INCREASING our countrys dependency on petroleum based fuel. The newer more fuel efficient vehicles help to DECREASE dependency. The older “clunkers”, that I have seen traded, …most are in very poor condition, and also in need of costly repairs. The new vehicles are under comprehensive Manufacturer warranties and will not require any costly repairs.
Another misconception, that I’ve heard lately is, that people are going into debt that they can’t afford. Well with lenders being extremely cautious about giving loans …people that cant afford the payments are NOT getting loan approvals.
In one example, one of my own customers, an active military man, stated to me that he will be saving about $200 a month in fuel costs, & his monthly payment on his new Ford Focus is LESS than $200 a month…. (by the way , he put zero money out of his pocket as down payment)
More details were released today that prove Americans are purchasing mostly American vehicles AND this is putting Americans back to work as well!
__________________________________
(Quote from the associated press)
“Among manufacturers, General Motors Co. had the largest share, accounting for 18.7 percent of new sales, followed by Toyota Motor Corp. with 17.9 percent. Ford Motor Co. was third with 16 percent of the sales. Detroit automakers represented 45.3 percent of the total sales while Japan’s Toyota, Honda Motor Co. and Nissan Motor Co. accounted for 36.5 percent.
The Toyota Corolla is the top-selling vehicle on the list, followed by the Ford Focus, Honda Civic, Toyota Prius and the Toyota Camry. There is one SUV on the list, the Ford Escape, which also comes in a hybrid model that can get up to 32 miles per gallon. Six of the top-10 selling vehicles are built by foreign manufacturers, but most are built in North America.
If the Senate approves the additional money, it’s likely to lead automakers to increase production and bring back laid-off workers. Many automakers reported low inventories due to increased sales from the program at the end of July. Already Hyundai Motor Co. has added a day of production to its Montgomery, Ala., plant, and Ford is considering increases.
Ford’s chief financial officer, Lewis Booth, said Wednesday night the company would decide this month and make an announcement in early September.”
________________________________
The environmental effects of more fuel efficient vehicles on the road is obvious, so I won’t go into the details on that subject.
I am not the least bit happy with how poorly planned the implementation of the bill has been. The funding allowed for $50 million to set up the administrative end of the system… but quite honestly, the dealers are handling the brunt of the administrative duties and it takes thrice as long to complete all the paperwork .. but dealership personnel are not getting any of the “administrative funds” And the $50Million dollars bought us a website that is slow, often crashes,.. and thus far hasn’t reimbursed my dealership a single dime of the $120,000 that we have given out to the American Citizens that qualified and are now enjoying their new vehicles.
The plan is not only an environmental plan , but also a great stimulus to Americas economy.
Putting the Auto industry back to work also puts many secondary suppliers back to work as well. The tire companies get more orders, the screw machine shops have to supply the nuts and bolts, the textile companies (as well as the raw materials needed to produce fabrics) have to supply more fabric to the seat manufacturers and the electronic companies will have to supply more radios, and the metal and glass companies… and so on and so on and so on…
And lest we forget that if auto industry workers go back to work and/or prosper… then those workers may be able to afford to purchase products and/or services that YOU might be in the business of providing.
It’s a trickle down affect.
So now the ‘Cash for Clunkers’ program has ended, it will be interesting to compare with Australia’s approach – specifically the tax rebate for new machinery (including cars)
Well well, that turned into a fine mess, didn’t it Ollie?