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Saving Money

Cash for Clunker Appliances

The fridge on its last legs? Uncle Sam wants you to replace it with a new, energy efficient model -- and will give you money to do so.

Cash rebates for clunker vehicles were such a smash hit, the government is at it again -- this time offering you cash for your worn-out household appliances.

The $300-million federal program -- administered through the states -- will provide consumers with a cash rebate of up to 15% of the cost of each new Energy Star-rated refrigerator, freezer, dishwasher, clothes washer, water heater and room air conditioner. Expect rebates to run from $100 to $250, depending on the cost of the appliance.

But wait -- there’s more. The program also covers central AC/heating systems, providing rebates of up to $1,500 for Energy Star-rated replacement systems plus a federal income tax credit of up to $1,500 on purchases made by the end of this year.

Though a few states -- Iowa, Kansas, Minnesota and Rhode Island -- have jumped the gun and already have the incentives in play, most other states will launch the program later this month. States’ shares of the federal program are based on population. California will receive the top amount: $35.3 million; Wyoming, the smallest: $511,000.


Based on early results in the four front-runner states, the appliance program will be as wildly popular with consumers as the cash-for-clunker car program was.

Appliance manufacturers and retailers are excited, eager for the sales boost the program will provide. The rebates should push sales of appliances to $22 billion this year -- up 10% over last year, when sales bottomed at around $20 billion -- though that’s still down 15% from the record hit during the housing boom in 2005.

General Electric, Westinghouse, Whirlpool, Maytag, Trane, Carrier, Viking and other manufacturers, as well as national chain and independent retailers, hope that many consumers in need of one appliance will decide to spring for another as well, since the government is paying part of the tab. Many retailers are also planning discount tie-in promotions, offering big savings on related merchandise -- such as outdoor gas grills and riding lawn mowers -- that’s not eligible for the federal rebates.

Is there a catch? Only a small one, but it shouldn’t cause anyone any grief. Uncle Sam wants proof that an old appliance is being recycled before paying the rebate on the replacement. But reputable installers will be happy to haul your old appliance away for recycling at little or no charge after they set up your new one.

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