Cash For Clunkers Program How It Works

As part of the U.S. Government stimulating the economy, they have set aside $1 billion to help boost new car sales and help prevent many in the auto industry from going out of business. This means that drivers looking to buy a new car can get anywhere from $3,500 to $4,500 off the price tag by trading in their old car (clunker) but even nice cars can be considered a "clunker" under the program.

Here's How It Works:

The Cash For Clunkers program or otherwise known as the CAR Allowance Rebate System (CARS) basically allows you to trade in your old car which gets lower fuel mileage for a new car that gets better fuel mileage at a discounted rate.

Qualifications:

* The Clunker must be less than 25 years old to trade it in.
* Only new vehicle purchase or leases qualify.
* The Clunker must only get 18 MPG or LESS to qualify.
* Trade-in vehicles must be registered and insured continuously for the full year preceding the trade-in. Yeah, that stops you from buying a $500 truck in the newspaper to trade in the next day.
* 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.

What To Bring to the Dealer:

* 1 Year proof of insurance. Just contact your insurance company and have them fax, mail, or print out a copy of your policy showing start and end times.
* 1 Year proof of registration. This shows that you have owned the car for at least one year.
* Title. The title must be 'clear' of any liens or encumbrances.
* The vehicle manufacturer date found on the drivers door jamb must be less than 25 years old.

Documentation You Must Sign and Fill Out:

* nThe trade-in vehicle is in drivable condition.
* nYou are the legal registered owner and have been for the past year.
* nYour vehicle has been continuously insured for the last year.
* nThe title is in your name and has been for the last year.
* nYou have not previously participated in the CARS program before.

What car manufactures are participating?

Well, maybe we should make a list of those that don't.. but seriously most all of them are and why wouldn't they? Toyota actually announced a couple days ago of their involvement in the program and said that Toyota, Lexus, and Scion will all be participating in the program.

"We appreciate the effort by the U.S. Congress to pass 'Cash for Clunkers,' which represents a great stimulus for the auto industry and our dealers," said Jim Lentz, president and chief operating officer of Toyota Motor Sales, U.S.A. "It will help consumers dispose of older high-emissions, less fuel efficient vehicles and replace them with new, more fuel efficient cars and trucks."

They plan on advertising on major TV networks this week of the program.

The Politics Around the Program

Congress says that around 250,000 sales will be generated based on the program which is calculated by $1 billion divided by $4,000 (average trade-in value). I for one believe that consumers, especially in these hard financial times, would be buying a car anyway at this point in time. Those 250,000 sales aren't your everyday hard working people that say, "oh, wow we get $4,000 if we trade in our car which is already worth about $2,500 to start paying a bank $400 a month that we don't have right now".

Edmunds, a car industry review site, said that they don't think more than 50,000 sales in the program will actually be consumers buying a vehicle solely because of the clunkers program.

Others in the industry think its great of the government that they are helping those that need it, both the consumer and the auto industry. I tend to think that this won't stimulate anything for the car industry and will only add to the American debt.