Congress Approves Cash For Clunkers Program
Federal Government Auto Incentive
The federal government has approved the Cash For Clunkers program that provides a voucher worth up to $4,500. This voucher can be used towards the price of a new fuel-efficient vehicle. Cars and trucks must be manufactured after 1984 to qualify.
The government has approved the program as an auto incentive to remove cars and trucks with higher emissions from the roads. Many of the hybrid tax credits have expired, and this program actually has a better incentive since the trade in value will be worth more. Cars and trucks that are built with newer technologies for fuel economy run cleaner than their conventional counterparts.
In addition, individuals must provide proof that they have owned the vehicle for at least one year. The amount of the voucher also depends on the trade in and mpg rating of the new car. The program only mentions that the new automobile must be at least 2 mpg or greater than the trade in.
Cash For Clunkers Program Expiration Date
The window of opportunity to participate is from July 1 to November 1, 2009. However, you do not have to buy the new vehicle on the day you trade in your old vehicle. The vouchers will be eligible for redemption for up to two years after the date of issuance.
Car Allowance Rebate System
The Car Allowance Rebate System (CARs) was formerly referred to as “Cash for Clunkers”, but consumers have been stuck with the old term ever since it was introduced. The program requires the dealer to provide you with an estimate of the scrap value of your trade-in. You do not have to sign an agreement to pay back the dealer for the credit amount if the dealer is rejected. Only a full purchase or a lease of a new fuel efficient vehicle will qualify.
Things You Need To Know
If you are trading in your vehicle at the dealership, you will have to sign over the title at the time of the deal. At the same time, the dealer must give you the new vehicle. Your vehicle must be less than 25 years old on the trade-in date and must get 18 or fewer miles per gallon to quality. All trade-in vehicles must be registered and insured continuously for the full year preceding the trade-in.
You don’t have to go and purchase a hybrid car, but you will save more money on gasoline if you choose to do so. Hybrids can automatically turn off the gas engine and can be powered by electric batteries. The government incentive is still available for conventional vehicles, cars or trucks, that get better mileage than your trade-in.
Truck owners will get $3,500 for trading in and buying a new truck or SUV with 2 mpg more fuel efficient and $4,500 for one with at least 5 mpg better. Trucks qualify based on class and vehicle weight. The Ford F-150 would be considered a light-duty truck and does qualify.
What Happens To The Trade-In Vehicles?
According to the government incentive program, the dealers that except the trade-in’s are eligible for a payment of $50 per vehicle. There are no EPA mileage measures for these vehicles, but the age requirement ensures that the trade will improve environmental quality. Dealers must ensure that the engine and transmission are crushed or shredded.
The engine, transmission and some other parts must be destroyed so they can’t be reused. Most dealers are already participating in the Cash For Clunkers program.