Buyers Beware - Cash for Clunkers! Official Start Date 7-27-09

The government has announced the official start date as Monday July 27,2009. See Below from the government's website www.cars.gov.

All consumers need to know what their rights are in this program. Beware of dealer scams!

OK, we all know that on Weds June 24th President Obama signed the much debated "Cash for Clunkers" bill which in summary allows a buyer to trade-in his/her old gas-guzzler for a new more fuel efficient ride and get up to $4,500 in a voucher toward the purchase price of this new vehicle. The program will now be known as Car Allowance Rebate System (CARS)

It is now time to move on and stop the "Why this program will not work and is a waste". This program can do some good. How many things have come of out Washington lately that will actually stimulate consumer spending? The Cash for Clunkers program will stimulate car buying and has proven to do this in Europe, proving to be very successful.

To review, the basic rules are:

• Your vehicle must be less than 25 years old on the trade-in date.
• Generally, trade-in vehicles must get 18 or less MPG (some very large pick-up trucks and cargo vans have different requirements)
• Trade-in vehicles must be registered and insured continuously for the full year preceding the trade-in date.
• Trade-in vehicle must be drivable.
• Owners who purchase a new passenger car that gets at least 4 mpg higher than their old "clunker" get a $3,500 voucher. If the mileage difference is more than 10 mpg, the consumer gets the full $4,500.
• Buyers of small trucks and SUV's need less of an improvement to get the same amounts. If the new vehicle gets at least 2 mpg more than the "clunker," a $3,500 voucher is issued; for new trucks or SUV's getting 5 mpg, the new car owner gets $4,500.
• Money can only go towards purchase or lease of new vehicles that qualify.
• Qualifying lease means a lease of an automobile of not less than 5 years.
• The fuel efficient automobile must have a MSRP of $45,000 or less.
• You don’t need a voucher, dealers will apply a credit at purchase
• Program to run from late July to November 1, 2009.

The ball is now in the hands of the National Highway Traffic Safety Administration (NHTSA) to formulate the final rules and how to administrate the program with the dealers. They have 30 days to get this done and roll-out the program.

Buyers Beware!
Now, why do I say buyer beware? Of course in every new program there are the scammers who try to take advantage of the uninformed. There currently are websites offering to basically pre-register you for the program and register you with dealers. As a buyer you do not need to pre-register with anyone. I repeat do not pre-register, do not give out your personal information, especially your social security number. The government is handling the program and will not be turning it over to any 3rd party. The CARS program will not request electronic submission of information from the individual consumer. When the program is finalized by the NHTSA dealers will then sign up with them. I bet you did not know that $50 million of the $1 billion for this bill has been set aside to administer this 3 month program.

It will be interesting to see how honest the individual dealers will be with how the program works. On the national level you know that GM, Ford, Chrysler etc will be very forthright. What I am talking about is when you walk onto the showroom floor. Remember we are talking about car salesman here. A major key point for the consumer to be aware of is that this rebate program is not to be taking the place of any current rebates the dealer has. The bill states " requires the dealer to use the voucher in addition to any other rebate or discount advertised by the dealer or offered by the manufacturer for the new fuel efficient automobile and prohibit the dealer from using the voucher to offset any such other rebate of discount. Also bear in mind that Cash for Clunkers has no impact on the cash-back and financing incentives that manufacturers offer; using a credit won't stop you from cashing in on those deals also.

Also be mindful that the dealer cannot charge you a specific fee for administering the CARS program when you purchase or lease. They can only charge their normal type of fees.

It is always important that you are an educated consumer and that is what I have hope to do in this hub.

See the eBook below as a auto dealership executive spills it all about how the dealers work the game to scam you.