Too Late to Get Cash for Your Clunker?
Editor's note: Since this column was published, the Senate approved an additional $2 billion in funding that was expected to keep the cash-for-clunkers program running through the end of August. U.S. Transportation Secretary Ray LaHood announced August 20 that the program would end on August 24 at 8 p.m.
I read that the government's Cash for Clunkers program ran out of money. Is it too late to take advantage of the program?
That's a good question, and car dealers are trying to figure out the answer while they wait for the Senate to decide whether to provide additional funding. Regardless, you may find a better deal elsewhere.
||Don't Count on Cash for Clunkers|
||Keep Your Clunker|
||Incentives for Car Buyers|
The government's Cash for Clunkers program -- officially called the Car Allowance Rebate System -- encourages people to trade in their old, gas-guzzling cars for a voucher worth $3,500 or $4,500 to buy a new car with better fuel efficiency. Your car might be eligible if you've owned it for at least one year, it was manufactured in 1984 or later, and it gets 18 miles per gallon or less in combined city and highway driving (you can look up your car's mileage rating at www.fueleconomy.gov). To qualify for the maximum voucher, the new car must be at least 10 mpg more fuel-efficient than the old car. You can get a $3,500 voucher if the new car is at least 4 mpg more efficient than your old one.
The program was expected to last until November 1 or when the government's nearly $1 billion in funding ran out. But the program was so popular that a dealer survey conducted by the National Automobile Dealers Association last week found that the $1 billion Congress appropriated to the program had already been -- or will soon be -- spoken for.
It's now up to Congress to decide whether to devote more money to keep the program running. The House passed a $2-billion funding extension on Friday, transferring energy stimulus funds to the program before leaving for summer recess. But the Senate still needs to make a decision and could vote as early as Tuesday. The original Cash for Clunkers vote was close in the Senate, and some Senators have been talking about changing the program's rules to require an even bigger improvement in fuel efficiency. If this happens, the extra funding could get delayed until the House returns from summer recess in September.
The NADA is warning car dealers to be careful about accepting more clunkers until a decision is made on extending the funding. "Until further definitive guidance on the availability of funding is provided by the administration, dealers who accept additional clunker deals may face a risk that they will not be reimbursed," the NADA said in a statement on Monday. "The NADA will continue to work with the administration to emphasize the importance that every dealer is reimbursed for a valid deal."
Even if the program does get extra funding, you may score a better deal by selling your car on your own. If you decide to take the government money, ask for the scrap value of your old vehicle, which will be destroyed. And above all, don't feel pressured to pay too much for your new vehicle. For more information about your alternatives, see Don't Count on Cash for Clunkers.
For more information and updates about the Cash for Clunkers program, see the government's Cars.gov site or call 866-227-7891. Also check out Kelley Blue Book's Cash for Clunkers calculator and Edmunds.com's Cash for Clunkers Resource Center.See my Incentives for Car Buyers column for more information about tax breaks and other deals that can currently help car buyers.
Got a question? Ask Kim at email@example.com.