Cash for Clunkers Explained
Posted on 24. Aug, 2009 by Stuart in Money
With all of the stimulus packages and government bail-outs recently, an explanation of the Cash for Clunkers program is due. Although it seems relatively simple in its nature, there are quite a few regulations to this program. Listed below are many answers to questions potential purchasers may have. All certified dealers will be able to help answer questions and assess which models are eligible for the Cash for Clunkers program.
Cash for Clunkers, or CARS (Car Allowance Rebate System) was designed to entice consumers to upgrade to newer, more fuel efficient vehicles. June 24, 2009 marked the beginning of this program. The program itself is based upon successful plans already established in Europe.
A credit of $3500 to $4500 is available at car dealerships nationwide. There are quite a few stipulations that should be addressed to the average consumer. For instance, if you are considering trading in a used vehicle that is worth more than the proposed $4500, this program is probably not for you. You must have owned and insured your vehicle for at least one year prior to the trade in. MPG (miles per gallon) is evaluated per vehicle and factors into your potential refund. When choosing a replacement automobile, the manufacturer price is not to go above $45,000.
The four categories separate cars, trucks, vans and SUV’s. These are primarily based on the weight of the vehicle and length of the wheelbase. Once the vehicle is turned over to the dealer it cannot be resold, it must be destroyed. The clunker will be stripped of usable parts, with the engine and drive train being completely eliminated. The dealer will be responsible for injecting liquid glass into the engine before sending it off the salvage yard.
Leasing is available for this program and businesses are also eligible to qualify. This program does specify that only new vehicles are to be sold, though a 2008 model is still considered ‘new’. The way this program classifies a 2008 model is one that has not been previously owned. With all the auto lots brimming with models that set due to a slow moving economy, this is very possible. When receiving the credit from the auto dealer, purchasers should know that this will not be considered extra income, and therefore will not be taxed. Domestic or foreign models qualify for purchase with this particular program.
Before taking your vehicle to the dealer, make sure that your title is free and clear of all liens. You also have to have had the title in your name for at least a full year. There are no exceptions to this. Multiple vehicle trade-ins are not permissible, nor are transferring the title from one name to another (without at least the full year of ownership). Your trade-in vehicle needs to be in good enough condition that you can drive it to your dealership, and should be manufactured at least twenty five years before trade in date. The MPG (miles per gallon) must be eighteen or below. Your newly purchased vehicle cannot be previously owned or leased.
While there are many regulations that should be addressed prior to going to your dealer, if you are eligible you should definitely take advantage of this offer. This opportunity to replace your old vehicle for a new fuel efficient model won’t last long. The government is not sure when this program will expire due to the success thus far. The projected end date is November 1, 2009, or when funds are no longer available. So check out your clunker, and see if its worth some cash via a new vehicle!
Photo source: Threaded Thoughts
