Sunday, July 26, 2009

Cash for Clunkers...

By now you've undoubtedly seen one of the 14,502 different commercials running on TV from the different car companies begging you to trade in your clunker for $4,500 toward a new car!!!

I'm particularly bothered by some of the car companies that seem to imply that the rebate is coming from them rather than a government credit. Also, the implication in the ads is that any old car will qualify when the reality is that very, very few cars and trucks will qualify.

Here are the details as I know them today courtesy of the government's website - www.cars.gov.

*** Note that the final document is a whopping 136 pages of legal nonsense. I'll try to highlight the key items.

* Your vehicle must be less than 25 years old on the trade-in date
* Only purchase or lease of new vehicles qualify
* Your vehicle must get 18 or less MPG
* Trade-in vehicles must be registered and insured continuously for the full year preceding the trade-in
* 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.

You also need to show
1) 1 Year Proof of Insurance. If your insurance card does not cover the entire year preceding the trade in, you will need other proof of insurance. Contact your insurance company to get evidence of 1 year worth of insurance. The form must include, at a minimum, the insurance company, policy number, VIN, start and end date of insurance (showing at least 1 year).
Proof of Registration going back at least 1 year.

2) Must have “Clear” title. This means you can't owe anything on the car or truck.

My favorite quote in the FAQ document - "even though a passenger car may
be quite old and/or in poor condition, it may not be an eligible trade-in vehicle under the
program because its combined fuel economy at the time of its manufacture (as measured
by the EPA) exceeds statutory limits. Some consumers have expressed surprise at this
result."


So to summarize, you must have an old vehicle that you own free and clear, that had a combined EPA estimate below 18 when new, that is drivable, that is insured, that is registered, and you have to buy a new vehicle that improves your MPG by 10 MPG to qualify for the max rebate. Sounds like it might drive a lot of traffic into dealerships, but I think many consumers will be surprised when they actually get into the details.

No comments: