On July 1st, 2009, the Car Allowance Rebate System (CARS) went in to effect. Formerly known as "Cash for Clunkers," the program compensates consumers up to $4500 towards the purchase of a new fuel-efficient vehicle.
Signed into law by President Obama on June 24th, the National Highway Traffic Safety Administration (NHTSA) has until July 24th to thaw out logistic implementation, establishing regulations as well as dealer and consumer accessibility to the program. After several government bailouts and loan-guarantees, a consumer-driven life-line for the auto industry will finally give U.S. citizens a chance to show their green side, as well as their red, white and blue stripes.
Here’s how it works
In order to qualify, the trade-in vehicle must be less than 25 years old but manufactured by 2001 and get at most 18 miles to the gallon. The new vehicle being purchased must get at least 22 mpg and for that 4 mile-per-gallon difference in fuel efficiency, the consumer receives $3,500; for at least a 10 mpg improvement in fuel consumption the consumer receives a $4,500 credit. The credit is immediately counted towards the purchase of the new vehicle.
In negotiating the CARS program, however, the consumer loses any excess trade-in value as the car handed over must be scrapped. Oddly enough, parts may be sold for aftermarket use.
To ensure people aren’t simply buying clunkers and flipping them, the NHTSA stipulated that the car must be drivable and have been owned and insured by the consumer for at least one year.
Steps to negotiating the program:
| Type | Today | Week Ago |
|---|---|---|
| 15 Year Fixed | 4.62%  |
4.67% |
| 30 Year Fixed | 5.15% | 5.15% |
| 1 Year ARM | 3.48% |
3.51% |
| 5/1 Year ARM | 3.62% |
3.68% |
| Type | Today | Week Ago |
|---|---|---|
| Line of Credit | 4.89%  |
4.88% |
| 10 Year Loan | 7.47% | 7.47% |
| 15 Year Loan | 7.61% |
7.60% |
| Type | Today | Week Ago |
|---|---|---|
| Interest Checking | 0.28% | 0.28% |
| Money Market/Savings | 0.38% | 0.38% |
| 12 Month CD | 1.13%  |
1.15% |
| 60 Month IRA CD | 2.40% |
2.41% |
| Type | Today | Week Ago |
|---|---|---|
| Cash Back Cards | 12.66% |
12.68% |
| No Annual Fee Cards | 12.08% |
11.97% |
| Reward Cards | 12.75% |
12.61% |
| Small Business Cards | 11.01% |
10.94% |
| Student Cards | 13.77% |
13.49% |
| Platinum Cards | 12.26% |
12.11% |
Comments
Sort by:
Eric Capper's comment has started a new conversation in the New Cars forum: http://www.filife.com/forums/carmakers-create-sites/337
Was this useful?
Yes(0)
No(0)
It is the typical senseless political decision made by Washington. Why does someone in 2009 who buys a new car get $3500-4500 from the government when the same person a year ago got nothing. Also does this not just potentially create a bit of an artificial market that cannot last forever. What happens when it stops? How much benefit will this actually do for the enviroment? Are we not just encouraging people to get into debt for a new car instead of maintaining their older vehicle? Debt is our problem, but it seems as if the government is solving the problem by over leveraging itself and encouraging us to have just one more drink of debt.
Was this useful?
Yes(4)
No(10)
I agree that it seems unfair that anyone who bought an efficient vehicle prior to 2009 gets nothing for their contribution to the environment. However, I would argue that consumer debt is a moot point. Sure, the car costs more now. But with rising oil prices and a developing global shortage the purchase should save the consumer money in the long-run. Which begs the question, do we want to be in debt now with a recovering economy or 10 years from now with an unknown economy?
Was this useful?
Yes(11)
No(5)
It really does nothing to benefit those who actually need the subsidy -- they tend to buy used cars that they can afford-used, not new. The program is just more bread and circuses. I resent it from the standpoint that I have to pay for it, these who need it can't use it, it does minimal for the environment. I'm sorry, but I didn't take Joe Blow across the street to raise.
Was this useful?
Yes(1)
No(7)
Post Comment