cash for clunkers stimulus

cash for clunkers stimulus

The Cash For Clunkers stimulus program starts today! Officially known as Car Allowance Rebate System (CARS), the ferderal program was officially signed into law today by President Obama.

The CARS program, modeled after similar successful European initiatives, is intended to encourage drivers to trade in their older, less fuel efficient vehicles for new cars with better fuel economy - for a credit worth up to $4,500 on new car purchases.

Cash For Clunkers puts cars, trucks, SUVs and minivans into several categories based on wheelbase size and weight, and the turned in vehicles will be crushed and reused rather than resold and driven again. Sticker proces for the new vehicles cannot exceed $45,000 - so no rebates will be given to those who choose to buy over-the-top luxury cars. The program begins today with a projected end-date of November 1, 2009.

This is all fabulous, however, if your used car is worth more than $4,500, participating may not make much financial sense.

cash for clunkers program

cash for clunkers program

The Senate passed the Cash for Clunkers Program today, which gives consumers with cars that get less than 18 miles per gallon the ability to turn them in for a $3,500 or $4,500 cash voucher. The bill was nearly defeated by Republicans, but Democratic support saved the day in part due to Obama's lobbying of the program. The President still needs to sign the bill into law.

Although many people believe that the program is designed to reduce global warming emissions through the eradication of gas guzzling cars, its true purpose is to help out struggling automakers and car dealers with new car sales. A person who receives a credit as part of the program cannot buy a used car with the monies. Car sales in 2009 are predicted to be nearly half of what they were in 2008.

The bill was sponsored by Senator Debbie Stabenow, a Michigan Democrat and one of the states most affected by the turmoil in the auto industry. After the bill was passed, Stabenow said, This is an emergency for families and small businesses - for an industry that has been the backbone of our economy for a generation."

The program will be implemented by the Transportation Department and this is expected to happen by early August. As part of their duties, the Transportation Department will create a public website for consumers and dealers to get more information, will certify "cash for clunkers" dealers and distribute the program vouchers.

Reprinted with permission from Gas 2.0