New rules for Cash for Clunkers

ANd if you go to

http://www.cars.gov/files/

Then you can look over all the documents and rules.

Stan

 

Hard to believe they spelled it that egregiously wrong.
.
I've got a friend with a ~ 25 mpg SUV who claims that he's read
all the stuff on CARS and nonetheless qualifies even though his
old vehicle is over the 18 mpg threshold. What am I missing?
This might actually get him into a new Prius, so I really want
to believe that he's right...
.
_H*

 

I wonder how long it will be before we start hearing of defaults on the new car loans? .... like the housing mess that got us into this problem.

 

Depends on how many people "needed" a Prius. I would hope that folks remember that there were plenty of reliable $15,000 cars that get 25-30mpg so for someone who had a 1998 Jeep Cherokee...and had decent credit (for loan rate of 4%), then if they drive alot, numbers add up and at some point you can only call in to work so many times because you are stuck on the side of the road

 

Still left the requirement that the car's title be destroyed (marked-up) so if the deal does not go though a new title will have to be generated by the state... Seems like another basic oversight to me...

 

I've been following some of the blogs on this program, particularly www.cashforclunkersfacts.com. There are a number of entries where people are complaining that it's unfair that their car doesn't qualify at 19 MPG because they NEED a new car because their old one is a deathtrap and breaks down constantly. Apparently, they haven't figured out that if they can't afford to replace their gas guzzling deathtrap with a $1500 Corolla then they certainly can't afford new car payments. I suspect there will be a fair number of loan defaults.

 

There are plenty of reliable used Prii out there. At the low end of the scale, I can't give away a Geo Storm for $500. New tires, runs flawlessly, everything works and consistently gets 32 MPG. There are also a bazillion cars in between that seem to have been forgotten in the C4C rush.

 

Tom,

You will be surprised that a lot of people were turned down for deals because the banks had tighten their loan requirement. When I was in the business manager's office signing my paperwork, I saw three different rejection letters for loans. I actually got my Prius when an old woman on social security couldn't get a loan.

I know even if you have good credit, you still have to had a car loan or something big in your credit to now get a new car loan.

 

Some of the cars that were 18MPG or less, and were adjusted to 19MPG or more at the time of the start of the program, are now being allowed, as long as the new car purchase was completed BEFORE July 24th (the start of the CARS program).

I have a 1991 Lexus ES250 that was one of those rated 18 MPG cars, that is now 19 MPG.

Sadly, I did not take Friday (7/24) off work, and instead picked up my Prius Sunday July 26th (expecting the car to still be 18MPG rated).
So I still do not qualify for the CARS program.


Can't win for losing...

 

Hang on to your car Bibrey, I have no doubt some lawyer will file a class action lawsuit which argues that the law passed by congress saying 18 mpg meant as of the day it became law. Congress picked that value knowing (at least potentially) what cars were elgible. Changing the rating data of various cars afterward is tantamount to not following the law.

These cars will be eligible in the end -- or at least the class action lawyers will see million dollar legal fees. Don't worry, - you plaintiffs will get a nice coupon for a free test drive of a new car.

 

That is the problem, they amended and ratified the program to make contracts that consummated by the date of program start (July 24th) honor the cars that WERE 18 MPG. Unfortunately, I picked my car up that Sunday (the 26th), and that was when my deal was consummated. After the changes were made, and after the law became effective.

If I had prior knowledge that they were going to change the rating on my car, I could have picked it up on Friday, and I would have received the $4,500 for my car. But I did not, and I did not want to take time off work, so I picked my car up over the weekend on Sunday. And... I'm screwed. (at least the universe operates consistently... )

 

Will the program still be going on tomorrow or was it just through the weekend? My friend is trying to buy a Mini using the CARS program and the dealership closed for the day while she was sitting there waiting yesterday and they were closed today. She's hoping to get it tomorrow.

 

Congress approved another 2 BILLION dollars for the program (3 billion total), so it should be continuing for a while.

[Edit] Just checked the www.cars.gov website and here is the rule:

 

No no.. Obama singed the law JUNE 24. That is the date I would argue sets which cars are eligible. Congress passed the 18 mpg based on data that existed on that date, not July 24. The law was effective July 1. NHTSB is not free to change the law, just implement it according to the what Congress outlined. Changing cars ratings after that date is extremely questionable and doing so to affect which cars are eligible under this law, likely illegal.

 

I was just reading on huffpo that the Senate still hasn't voted on the extra 2Bil ans will be doing that this week.

 

Ah, thanks for the clarification. I see what you are saying. Thanks!