Cash for Clunkers
If your job seems reasonably secure and you own a gas guzzler, now is the time to consider buying a new car. Not only are car dealers ready to do just about anything to sell cars because sales have been down significantly during the recession, but the U.S. government has a new program that encourages people to buy vehicles with better gas mileage.
One of President Obama’s goals has been to improve our environmental practices along with using such efforts to support the economy. The Consumer Assistance to Recycle and Save and Act (CARS) bill he recently signed was created to support automobile sales in the U.S. along with helping consumers to obtain and use vehicles that use less gasoline.
If you agree to turn in your post-1983 vehicle as you buy a new, more fuel-efficient vehicle under the CARS program, you will get $4500 from the government to support your purchase. While this may not seem to be a whole lot for a trade-in (and if you participate in the program, you will not get additional trade-in credit because these older vehicles will not be resold), if you look up your vehicle’s value, you may find that the government is giving you a better deal than most dealerships will. Just like housing, used car values have gone down because of a lack of demand by customers. Last year’s extremely high gas prices have reduced customers’ desires for large SUVs.
There are rules about both the clunker you turn in and the new vehicle you buy. Your present vehicle must get 18 miles per gallon or less. There are also gas mileage rules for the new vehicle, depending on its size. Also, the decision needs to be made soon as funding appears to be limited in terms of size (one billion currently) and time (end of October). In order to keep people from just buying old cars and cashing in, rules state that you have to have insured the vehicle for at least one year. You can find all the rules on the web (search “The Consumer Assistance to Recycle and Save and Act”) and of course dealers will be aware of the rules and anxious to help you take advantage of the program.
As with any political product, reviews of this program are mixed. Environmentalists, for example, are concerned that the required levels of gas mileage for the new vehicles are not strict enough and some opposed it for this reason. Nevertheless, this program may be a great opportunity for people who need a newer vehicle and who would like to protect themselves to a degree against the possibility of another rise in gas prices.
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