Turning clunk into cash
In an effort to kickstart the auto industry while also getting polluting gas-guzzlers off the road, President Obama signed a cash-for-clunkers piece of legislation on June 24 called the Car Allowance Rebate System. Credits for the program are expected to be available around July 23, and the program ends Nov. 1 or when funds run out, whichever comes first.
The way it works is if your car gets 18 miles per gallon or less, you could trade it in for a new car that costs $45,000 or less. When you do so, the federal government would send the car dealer up to $4,500 on your behalf. There are a few stipulations. For instance, the dealer has to be registered with the program for you to get the credit. (Check www.cars.gov for a list of participating dealers.) Also, the car you’re trading in has to be registered, used for at least a year and can’t be more than 25 years old. The new car can’t be used and has to be at least 4 mpg better than the old for $3,500 back or 10 mpg better for $4,500 back. There are slightly different rules for various sizes of trucks, and there are incentives to trade in for a hybrid vehicle, as well.
What happens to your old car isn’t exactly a waste-free operation. It goes to a salvage operator, and its engine, transmission and certain other parts must be destroyed. Some parts can be resold.
USA Today’s James R. Healey reports that critics, such as the American Council for an Energy-Efficient Economy, have said the program is far too lenient and that its main goal is to clear car lots rather than to seriously cut fuel use.
Funding for the $4 billion program comes from the economic stimulus package.