Cash For Clunkers Hits Bump

Details Not Final In Federal Program To Give Buyers Up To $4,500 To Buy Fuel-efficient Vehicle

July 01, 2009|By Eileen Ambrose | Eileen Ambrose,

Those eager to take advantage of the cash for clunkers program today will need to idle those plans for a little longer.

The government program applies to new vehicles purchased starting today, according to the legislation. But that legislation was signed into law only last week, and government officials have until July 24 to finalize the details and get the program running.

Meanwhile, the National Automobile Dealers Association is advising its members to wait until regulations are in place before giving away federal cash incentives, or risk not getting reimbursed by Uncle Sam.

The cash for clunkers program, officially called the Car Allowance Rebate System, provides $3,500 or $4,500 off the price or lease of a new fuel-efficient vehicle if consumers trade-in an old gas guzzler. It applies to purchases made this month through Nov. 1, or until the $1 billion in federal funding runs out. Roughly, that could occur once 250,000 vehicles are sold.

Critics have said the program won't help many consumers because of its restrictions. Basically, the program will benefit consumers whose trade-in is worth less than the cash incentive and who have the money to buy a new vehicle or good enough credit to qualify for financing.

You can find more information at the government Web site, Not many details are available yet, but the site allows you to sign up for updates.

Government officials also warn against Internet sites with similar sounding names that are not affiliated with the program. One site implied consumers had to register and solicited personal information, such as income, Social Security number and date of birth, said Rae Tyson, spokesman with the National Highway Traffic Safety Administration. You don't have to register for the program, but only have to visit a participating dealer, Tyson said.

Also starting today, the government has a new phone number - 866-227-7891 - to handle questions specifically about the cash for clunkers program.

The program is designed to spur car sales and help the environment by getting gas guzzlers off the road. Trade-ins can't be resold and must be scrapped.

To qualify, trade-in vehicles must be less than 25 years old and must have a combined fuel economy rating of 18 miles per gallon or less. Combined fuel economy is calculated using city and highway miles per gallon.

The size of your incentive will also depend on the new vehicle you purchase.

New passenger automobiles, for example, must have a combined fuel economy of at least 22 miles per gallon. You'll get a $3,500 incentive if the new passenger car gets at least four miles per gallon more than your trade-in. You'll receive $4,500 if the new car gets 10 miles or more per gallon than your old one.

Find out the combined fuel economy of your trade-in at

Peter Kitzmiller, president of Maryland Automobile Dealers Association, says dealers are still waiting for many details, including how the government will reimburse them. But Maryland dealers are eager for the program to get up and running. "We don't need people sitting on the sidelines" waiting to buy a car, he says.

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