'Cash for Clunkers' Government Money for Cars

Get U.S.Government Help to Buy New Cars by Trading in Older Vehicles

Apr 26, 2009 Janienne Jennrich

"Cash for Clunkers" (updated to be C.A.R.S. or Car Allowance Rebate System) plan to help American new car buyers get cash for U.S. clunker cars getting low mileage - MPG.

UPDATE: Cash for Clunkers is continuing in and after August 2009! Both the United States House and Senate have approved the Cash for Clunkers or C.A.R.S. program to pay government money to people to turn in old gas guzzling vehicles. The idea is to offer government cash for cars with low MPG and give incentives for buying new, more efficient automobiles

Several US states, including California and Texas already offer cash incentives to get older vehicles off the roads. Reasons for these programs include reducing the polluting gases that older autos emit, helping consumers afford better and more cost-effective vehicles, and at the same time helping jump-start the auto industry.

Congress Makes C.A.R.S. Auto Rebate Program Nationwide

While bills in Congress vary by state, most offer vouchers up to $5,000 toward the cost of a new vehicle for turning in a qualifying ‘clunker’ that is at least eight years old. These vehicles will be destroyed.

The Cash for Clunkers program expects to replace nearly two million older, inefficient vehicles over the next two years at a cost of $4 billion to $6 billion.

Why an Older Car Rebate Program?

According to the Wall Street Journal, Daniel Sperling, a professor of engineering and environmental science at the University California, Davis reports that older vehicles emit air-pollutants, such as nitrogen oxide and sulfur dioxide, at rates as much as 100 times higher than newer vehicles. They have less-sophisticated pollution controls and emission levels tend to worsen as vehicles age.

Details of Cash for Clunkers / Cash for Cars / C.A.R.S. / Car Allowance Rebate System

A few versions of the bill [were] being debated in both the House and Senate.

A bill by Rep. Betty Sutton (D., Ohio) requires that the autos turned in be at least eight years old and that the replacement new car get at least 24 miles per gallon on the highway. This bill would offer consumers vouchers from $3,000 to $5,000.

In another version, vehicles turned in must be drivable, be registered in the U.S. and have a fuel economy rating of lower than 18 miles per gallon.

As the varying possibilities are examined, the White House offers a compromise of providing a voucher to anyone who buys a car with better mileage, with the dollar amount of the voucher increasing as the mileage is improved.

See Updates at top and bottom of article, please.

Cash for Clunkers Auto Rebate Program On Now

According to CashforClunkers (dot org) Rep. Steve Israel, (D-N.Y), a sponsor of one of the bills, said officials were ‘90 percent’ of the way to a compromise in the ‘Cash for Clunkers’ program.

Autoblog does have a good point when it states that, “Even after an agreement is reached on a final bill, policymakers will need to figure out how to come up with the (up to) $4 billion that the program is expected to cost – not to mention how to handle the resulting lot-fulls of so-called clunkers.”

That should be interesting. In the meantime, perhaps it’s time for Americans to start cleaning personal belongings out of those old cars.

July 2009 Update on C.A.R.S. or Car Allowance Rebate System (Cash for Clunkers Program)

According to the U.S. government CARS website, this bill has now been signed into law and has been given the new name C.A.R.S. or Car Allowance Rebate System. The site states: "While the CARS Act makes transactions on and after July 1 potentially eligible for credits under the CARS program, interested dealers and consumers may want to wait until all of the detailed issues that must be addressed in the implementing regulations are resolved and the final rule is issued. Issuance will occur around July 24."

See the car rebate website above for more information or call the official U.S. government program hotline at (866)-CAR-7891.

References:

Official U.S. Government Car Allowance Rebate System website

Article: White House Presses Plan on Car Swaps, April 2009 by Naftali Bendavid, Wall Street Journal Online

Article: Is 'Cash for Clunkers' Recycling Program Really Helping?, April 2009, by Gregory C. Lamb, Christian Science Monitor and ABC News Online

Article: U.S. Cash-for-Clunkers Deal Reportedly Nearing Congressional Compromise, April 2009 by Jeremy Korzeniewski, Autoblog Online

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