CARS.gov - Car Allowance Rebate System - Home - Formerly Referred to as “Cash for Clunkers” Your vehicle must be less than 25 years old on the trade-in date Only purchase or lease of new vehicles qualify 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 You don't need a voucher, dealers will apply a credit at purchase Program runs through Nov 1, 2009 or when the funds are exhausted, whichever comes first. The vehicle that you are trading in is required to be destroyed. Therefore, the value you negotiate with the dealer for your trade in is not likely to exceed its scrap value. The law requires the dealer to disclose to you and estimate of the scrap value of your trade-in vehicle. The CARS Act requires the dealer to use the credit under the CARS program in addition to any rebates or discounts advertised by the dealer or offered by the new vehicle's manufacturer. The dealer may not use the credit to offset these rebates and discounts. FROM THE FAQ: Is the credit subject to being taxed as income to the consumers or dealers that participate in the program? The CARS Act expressly provides that the credit is not income for the consumer. However, the credit will be considered as income for the dealer.
You do have to remember that there are those of us who actually do repairs on our vehicles. For instance, I have a 1999 S-10 ZR2 truck with 122,000 miles on it. The body on it is starting to go around the bottoms of the doors but, Overall mechanically it is in great shape. fueleconomy.com gives me an esitmate combined mileage at 17MPG. I get around 18-19 MPG in the summer and it drops off in the winter. The full size truck I have gets around the same mileage with a 5" lift kit and 33" tires. I also regeared it to save the transmission and fuel mileage. This cash for clunkers program probably won't do much. It is a program to get consumers to buy a new car. The markets are jittery and job losses continue on a day to day basis. I understand why dealerships are not moving inventory. I drive 15 miles to my work truck and then back home. I throw all my gear and stuff for work in the S-10. It makes no sense at all to get rid of my S-10 just to spend money. It's cheaper for me to keep my vehicles running and pay full coverage insurance as well. Then, I can bank roll that $500 per month of what would be used on a payment. Yes, i pay cash for everything. LOL
Jimmie84 I am like you. I do all my own repairs when possible. I have a 2000 4Runner Limited with 302,000 miles and the transmission and engine have never been rebuilt. I live in Cleveland and the heavy salt has affected many of the bolts and other items that make it a lot more difficult to work on. I am in the market for a new car and this program works prefect for me.
I put $ 500 down on a Gen III Prius II yesterday but what is coming in next to the dealer has bluetooth and $ 200 floor mats! Ah well. While I would like to pay $ 22,750 I guess I'll see what shows up. I'll be clunker crushing in a 1991 Ford Escape V6 which qualifies at 18 MPG for $ 4,500. Plus no sales tax on the new Prius here in Connecticut plus free for life of car oil changes, tires, first ding, and some misc perks. All and all a good deal I reckon. This will be our "other" Prius - we have a 2006 as well which has performed flawlessly.
Poor people driving a clunker are nto going to take advantage of this bill, but I wonder if a secondary market for clunkers is going to develop. Any claims that this is not the intent of the law are missing the point that the law is NOT an environmental one, it is meant to spur car sales. Reading about people who are going to scrap MY 2000+ SUVs shows just how moronic those car purchases were. Unbelievable.
Whoops sorry, that's a 2001 Ford Escape V6 above for $ 4,500. I'm just obviously too excited about junking that wreck (worth maybe in a tail wind on a sunny day $ 1000.) Ford did a terrible job building that car. Our engine was a total loss after 2000 miles and had to be fully replaced. The manifold cracked, the windshield cracked. The weather seals in the cabin leak. Halelujah for Cash For Clunkers!
Why do you think my 2000 SUV purchase was moronic? I put over 300,000 miles on the vehicle over the last 10 years and it’s great that this program will allow me to get rid of it for $4,500. A dealer would never give that much for any vehicle with that many miles. I could sell it for $5,000 by listing in local papers, craigslist and other sources. When you list it you have to show the car and deal with people trying to rip you off. This CARS program is perfect for me.
It’s sad that they are going to demolish this beautiful vehicle. This is why its not worth more then $4,500
My parents just put a deposit down on a Blizzard Pearl Package III 2010 Prius. They are trading in a 1993 E150 Van with more than 300,000 miles for the $4,500 credit. In addition they will either sell their 2003 Mercury Grand Marquise or trade it to the dealer if they can't sell it in the next 2 weeks. The dealer they are working with already has over 10 cash-for-clunker deals ready to go with deposits down. The dealer is marking the new cars as sold holding them until the program goes into effect at the end of the month. I am shocked that my parents are buying a Prius. Back in 2004 they decided they needed a "fuel efficient" car and came back with the Grand Marquise! Until then they had driven full size Ford conversion vans and Ford Explorers. They also drove a 2009 Jetta Sportwagon TDI and though they like the additional cargo room and better interior my mother thought the ride was "too rough". She complained that she could feel the surface of the road. On the other hand she like the soft ride of the 2010 Prius. The choice of the Prius over a TDI Jetta is something consider my father is a diesel mechanic.
Oh man... I've got a 1984 Mercedes 5 cylinder diesel wagon that I've been driving for 15 years, with 316K on it. As best I can tell, the EPA rating is 19 mpg! I actually get around 25 mpg but the 'official' mileage is only one mile off the upper limit. Sheeesh...
I'm doing the CARS program. I'm turning in a 98 Honda Passport. $4500 off a new Prius III w Leather & Nav. Can't wait. The dealer is actually letting me pick it up and do the trade even before July 24th if the car comes in. Nice.
I'm a bit surprised you get to do this--wish we did! How did they work it out? Our dealer tells me they can't even promise they'll be able to honor CARS--it all depends on what the rules are when they get published on the 24th or thereabouts. If the $4500 is really reported as profit for the dealer, doesn't the taxation cut into their share of the purchase price on the Prius? Don't think they'll go for that. We may end up having to sell our van, in the end.
Check out. cars.gov for information. Waiting for the program to start and the dealer to fined a Blue Ribbon package II. So I can no longer be a priusownerwantabe. Trading in a OLDS Bravada 16mpg....more like 14.1mpg. I won't miss that except on a very, very snowy day.
Hey, Rob. I was surprised that this dealer is doing them early, but they are. I went to another and called a 3rd and neither of those dealers will take the chance of doing the deal early. The one I'm going with had all of their paperwork done and everything, so I guess they feel very confident they'll get their money from the gov't. I think there is some deal where they don't count that money towards the taxable income. I do not think this plan in any way hurts dealers, other than some of the headaches in getting the program underway. When at the Toyota dealer, I couldn't help but to read an internal Toyota newletter to its employers about this program. It basically said, most of the cars we've sold won't be coming back as "clunkers" so there for it's a great opportunity to turn people on to the Toyota brand and hybrid concept. So...this is a true win-win...stimulate the economy AND get rid of the junk. I love it...I hope they extend it in November. (It runs out Nov 1st or when the money is gone BUT...Europe extended their program after it was so hugely popular. I would not count that out as an option for the US.)
No, that is not how this works. The dealer is obligated to scrap the car. The car scrappers will report the car's value, ie let's say 800 bucks for an old scrappy car. The dealer has to prove the car's scrap value was $800. They show a copy of the check or payment for the scrapped car that correlates to the VIN# and the rest comes from the government. In what is, we all pray, a reasonable time frame. I am told that it's supposed to be a 10-day turnaround, but I LMAO'ed at that one. Even filing taxes electronically is a 2-month wait for a refund. As a dealership, we do not expect a 10 day "refund" back of the $4500 - less - scrap - value. That's idiotic to expect. What I expect will happen is that some dealers will initially start this, and then 20 cars later and $90K in the hole with no end in sight on the $$$ coming from the US Treasury, they will stopt he program unless a clunker is worth CLOSE TO its scrap value. Some dealerships won't be able to afford to be out a few hundred thousand bucks. Dianne
Sorry, that's not how it works. As the law is written right now the scrap value of the car has nothing to do with the $3500/$4500. Any money made on the sale of the car to the scrapper is completely the dealers profit minus what was negotiated with the seller. The dealer has to submit the old and new cars VIN #'s and certify that they have OR will submit the old car to an approved scrapper. There is no showing of check or anything ridiculous like that. The dealer is obligated to turn the car over to an approved scrapper and the engine and drive train must be destroyed. The rest of the car will most likely end up in pick-a-part yards or sold by other means as spare parts. It will be up to the dealers to negotiate with the scrappers the added value of cars that have many good parts left. With the CARS program there is a federal mandate that states the electronic transfer be no more that 10 days after the submission of eligible information. When filing taxes there is no federal mandates as to how long a refund takes to post that I know of (although I haven't looked up the tax code on this). I don't know who's doing your taxes but I do my own and file electronically and this year I had a deposit in 9 days. Back when I used to file by mail at most it would take 3-4 weeks. That's as long as you weren't filing on the 15th
We already are seeing different details emerging -- because what's been "mandated" isn't yet signed off by Obama, and what's been said will happen changes with every bit of new info we get. I'm not doing this program early anyway, so we'll know 100% what's really going to be when it passes and is signed and official. That's the 24th. I already see a huge loophole that they need to close - how can you be certain and sure that a scrapper really scraps the car? And, doesn't try and part the car out or resell it? I mean, REALLY sure?
Will the buyer be taxed on the 4,500? (22,750 + 4,500) X 8.375% NY. or Will it act as a downpayment? A reduction of the normal OTD total.
As a buyer, please don't over think this. It is very easy IF you have a car that meets the federal requirements. It's basically identical to a trade-in in which the dealer is giving you $4500 if buying a car more than 10mpg more than your trade-in. That's it. It comes off the price of the car, so no, you don't get taxed on it. Another thing to keep in mind and it states it explicitly on the cars.gov site is that this CARS voucher CANNOT replace any negotiations, deals, etc. that the dealer has. Obviously, with the Prius as I've found out this past month, there are few anyways. But if buying something else, do not let the dealer tell you they cannot negotiate due to this amount. They get the entire $4500 regardless. Dianne, have you gone to the cars.gov site recently? The law IS signed and posted. ALL of the information for the consumer is there. It's obviously enough information on the dealer's side that mine is going to do the car exchange before July 24th...so they must trust the gov't more than you do. Thanks.
"I already see a huge loophole that they need to close - how can you be certain and sure that a scrapper really scraps the car? And, doesn't try and part the car out or resell it? I mean, REALLY sure?" How can they EVER be sure that laws are abided by? This is a LAW. They MUST do it and will be fined. The law states any violations will be fined $15,000 per incident. Fr cars.gov: "The CARS Act requires that the trade-in vehicle be crushed or shredded so that it will not be resold for use in the United States or elsewhere as an automobile. The entity crushing or shredding the vehicles in this manner will be allowed to sell some parts of the vehicle prior to crushing or shredding it, but these parts cannot include the engine or the drive train."
