The Car Allowance Rebate System (CARS) bill, passed by Congress in mid June, provides $1 billion worth of vouchers to car buyers who replace gas guzzlers with new cars that are more fuel efficient. Consumers will get up to $4,500 towards the purchase or lease of a new car for trading cars worth as low as $400.
The scams
Some folks through web sites are asking consumers to provide personal information, including names, addresses and social security numbers, so they can "register" for the program. Others tell car buyers they will put them in touch with authorized "Cash for Clunkers" dealers in their area. Don't fall for any of that. Go directly to your dealer and ask them if they are participating in the program (each dealer had to register to participate). According to the National Association of Automobile Dealers , some 16,000 dealers across the country have registered for the program.
The phrase Cash for Clunkers should raise a red flag. The official name, Car Allowance Rebate System, should be used in searching legit information.
How is the program going?
So far, it looks like a big hit. According to the Detroit Free Press, "Dealers across metro Detroit said Monday they were flooded with customers." The New York Daily News reports that "three of the city's biggest car dealers collectively say they've taken about 100 clunkers and made the same number of new sales." "We're knocking the cover off the ball," said Brian Benstock, vice president and general sales manager of Paragon Honda and Acura in Woodside, Queens."Saturday, we had a showroom full of people and we've done 33 deals," he said.
Environmental Impact.
At Paragon Honda, Benstock said that of the first 23 deals:
- 10 customers qualified for the $3,500 rebate, a four- to nine-mile per gallon improvement over their old car's performance.
- 13 people got the $4,500 rebate because their improvement was more than 10 mpg.
- 16 mpg was the average for the clunkers traded in.
- 27 mpg was the average for the new cars sold, a 60% improvement, Benstock said.
Will this help US automakers?
Only if they have low mpg cars that people want. If people turn it American cars for Hondas and Toyotas, that will help Japanese automakers and their workers at US plants, but definetely not Detroit.
Bottom line
If you can afford car payments, you have to consider this program. "Consider" is the key word. One has to do their homeworks and make sure he or she can take on the payments in these difficult times.
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