Saturday, June 27, 2009
Uncle Sam wants people driving gas-guzzling vehicles to trade them in for fuel-efficient models, and he’s promising rebates of $3,500 and $4,500 to attract them.
President Barack Obama this week signed into law the “cash for clunkers” program. Thirty more days will be spent refining it, which means dealers will begin accepting trade-ins around July 24.
But local car dealers say some car shoppers already are asking about it.
The Car Allowance Rebate System does not apply to all automobiles:
• Your vehicle must be less than 25 years old on the trade-in date.
• The program applies only to the purchase or lease of new vehicles, not used models.
• Generally, trade-in vehicles must get 18 or fewer combined city/highway miles per gallon.
• Trade-in vehicles must be registered and insured continuously for the full year preceding the trade-in.
Source: National Highway Traffic Safety Administration
“We’re getting inquiries, but people need to know it’s not quite here yet,” said Peter Kultgen at Bird-Kultgen Ford, adding that the particulars continue to be nailed down.
Officially called the Car Allowance Rebate System, the bill provides $1 billion for dealers to offer rebates of $3,500 or $4,500 through November or until the money runs out.
It has two goals: put Americans in a car-shopping mood and put more fuel-efficient vehicles on the road.
Automakers and their unions have lobbied heavily for the incentives to help the auto industry boost sales and stabilize General Motors and Chrysler, which have received billions of dollars for government-led bankruptcies.
In May, U.S. auto sales were 34 percent lower than a year ago, and the industry expects to sell fewer than 10 million vehicles in the U.S. in 2009, compared with more than 16 million in 2007.
Though domestic car companies appear to be hurting more than their foreign counterparts, the program does not discriminate in that area. Clunkers traded in on imports also qualify for the rebates.
“Will this spur buying? Absolutely,” said Jerry Miller at Miller Mazda. “If you can get $3,500 or $4,500 on a car worth maybe $300, plus all the other rebates and incentives, I think people will consider it.”
But Kultgen wonders how much bang and buying that $1 billion will create.
The Congressional Budget Office has estimated the money will put 250,000 new vehicles on the road. Kultgen described that number as “minuscule,” considering Americans drive about 250 million vehicles.
“The people driving these clunkers are not terribly affluent and are not likely to buy new cars,” Kultgen added.
But proponents say these clunkers don’t necessarily have to be old, just gas guzzlers.
Here’s how the plan is supposed to work: Car owners could get a rebate worth $3,500 or $4,500 depending upon how much less fuel-efficient their clunker is than the new vehicle they will buy.
For example, car owners could get a voucher worth $3,500 if they traded in a vehicle getting 18 miles per gallon or less for one getting at least 22 mpg. The voucher would grow to $4,500 if the new car’s mileage was 10 mpg higher than the old vehicle’s. Different mileage standards apply to pickups, minivans and SUVs.
Dealers can help customers calculate the gas mileage of their vehicles.
Buyers can’t cheat the system by quickly buying a junker somewhere and driving it to the dealership to trade. They must provide the title, registration and insurance papers showing that the vehicle they hope to trade has had continuous registration and insurance coverage for the past full year.
The National Highway Transportation Safety Administration verifies information for the auto dealerships and issues a financial credit to the dealer, assuming all program requirements have been met.
Rebates are good only on the purchase of new vehicles with a retail price of less than $45,000, not on used vehicles. Dealers must ensure that the older vehicles are crushed or shredded.
The program is aimed at replacing older vehicles built in model year 1984 or later and would not make financial sense for someone owning a vehicle with a trade-in value greater than $3,500 or $4,500.
“It has the potential to do some good, drum up some business. I know it went over well in Europe, which is where we got the idea,” said Mark Stewart, general sales manager at John McClaren Chevrolet in McGregor.
Jose Mancha, finance manager at Saturn of Waco, is getting a kick out of the new program. His dealership has been advertising $2,000 credits for anything customers can drive into the lot for the past two months.
“The government is copying us,” Mancha said with a laugh. “We’ve really been getting some clunkers off the road.”
The government is warning consumers to be wary of unofficial “cash for clunkers” Web sites that seek personal information or direct consumers to register early for the program.
Early registration is not necessary, and the National Highway Traffic Safety Administration has given information about these unofficial sites to the Justice Department’s Internet Fraud division.
The Associated Press contributed to this story.
mcopeland@wacotrib.com
757-5736
Comments
By gigi
Jul 2, 2009 5:40 PM | Link to this
I haven't seen the reason behind excluding cars over 25 yrs old. Why wouldn't we want those off the roads? This program as laid out will only appeal to a small group - there are certainly not at lot of people who can afford the new car prices. If the goal was really to drop pollution levels, then any old car could have been used to purchase a more fuel efficient new or used car. By saying only new cars, it is directed at helping the car manufacturers and unions.
This is similar to the stimulus for hiring new workers- a credit of what? $3500 is a joke compared to the real cost of hiring a new person. Giving a credit of $3500- 4500 toward a purchase of a $20,000 + car really doesn't cut it.
And to Katie - what a stereotype you threw out.
Both sides need to find the truth, look at issues honestly and cut the name calling!
By James
Jun 29, 2009 1:12 PM | Link to this
ANYONE WHO ACCEPTS THIS MONEY IS A THIEF! They are stealing from the taxpayers, plain and simple! Wake up and grow up, people and quit expecting the government to fix all of your problems!!! As long as we keep allowing Uncle Sam to be our nanny, this country will continue to head you-know-where in the proverbial hand-basket.
By Taco
Jun 27, 2009 6:26 PM | Link to this
Still waiting for my check and gas card from Bama, yep, he sure is doing a great job.........grandkids will be paying for all this garbage.....what a shame...
By eye in the sky
Jun 27, 2009 6:07 PM | Link to this
That is a good point jlk. Not trying to talk bad about anybody, but so many employers in Waco pay next to nothing. If you are a man with a family, it is very likely you will fall into the below poverty level in Waco. These days, even in Waco, a liveable wage is around $15.00 an hour. Not very many employers in Waco pay that. As far as salaries go, a person needs to be making at least $35-40k. Again, not very many places pay that in Waco. Who would waste their high priced education in Waco,Tx? Last time I googled it, the median income in Waco was like $25 grand or something close to that. Drive on brother. Do what you have to do.
By qzy
Jun 27, 2009 5:00 PM | Link to this
Chris, I saw nothing in Ron-Texa's remark that remotely indicated any race. His statement was referring to low-income people who can't afford a $30-45,000 car.
By jlk
Jun 27, 2009 4:01 PM | Link to this
Well, I see you got my "best-side" in the front page photo. It's a clunker alright and its all I can afford. It' paid for too. The real kick-in-the=head is according to the guidelines it doesn't qualify because it is 27 years old. Even if it did qualify I couldn't buy another one because I am unemployed. This good ol' Waco job market and really who can afford a 30k vehicle on the wages that are paid around here, even when you can find work. I really don't feel like "owing my soul" and prostrating myself over work just so a car dealer, a financier, can "sell" me something that probably won't get paid for by the next dozen "previous owners".
By Chris Whitfield
Jun 27, 2009 3:08 PM | Link to this
Let me guess Ron-Texa, You are trying to say that this program for getting these old, low mpg cars off of the road will help too many minorities get into new vehicles? Right? Well guess what. Go to any trailer park, or redneck bar, and you will see some of these same people of whom you speak and they are driving some of these same old clunker cars. There are many different kinds of people who bought homes that they could not afford. Just like there are many people who buy these $50 and $60k superduty trucks that they can't afford. So many people in Waco want to make thinly disguised or blatant racist statements. People in Waco are so close-minded it is ridiculous. I wonder what people would be saying if George W. Bush would have been pushing this program?
By eye in the sky
Jun 27, 2009 2:52 PM | Link to this
Actually, a program like this has been tried in areas like Houston and Dallas and a few towns surrounding these cities before. There was a long waiting list to get the vouchers. I think a lot of people would like the chance to use the vouchers to get out of a hooptie they may be driving simply because it may be hard to save up a down payment on a new car. My credit score is good, and I can say from experience that Waco car dealers try to get rich off of one sale. That's why I wouldn't even waste my time trying to deal with a Waco dealer. I just drive straight to Dallas or Houston. I might get warranty work done here if I have to, but that's about it....Katie you are right. President Obama could make it snow in the 100 degree heat in Waco, and people would complain about that. I think he's doing a fine job. He has only been on the job for 6 months. I guess these people who complain were happy with the way the country was over the past 8 years. Maybe if he put on some cowboy boots and a cowboy hat that would make people feel better.
By Ron-Texa
Jun 27, 2009 2:42 PM | Link to this
Well anyone with a 25 year old car, that gets 12-14 miles to a gallon are the same ones that can't afford the new house they bought, much less $30-$45,000 for a car. And my 25 year old car is worth more as a collector car, than have it ground up at Lipsits. So this is just another good old boy, with absolutely 'no' experience Government Program!! It won't work!!!
By the next big thing
Jun 27, 2009 2:36 PM | Link to this
I'm tired of this misconception that people have that because they drive one of these big hog, mr. or ms. me too suvs they think they are bulletproof. Just read the news anywhere. People die in suv crashes everyday. Most of the people who drive these things are bad drivers, but think that they are in nascar or something. Some of the old school GM and Ford cars from the 60's and 70's are classics, and I have my eye on a few even though they are heavy and not fuel efficient. As far as new cars go, people might as well get used to driving lighter more fuel efficient cars. It's just the way the world is progressing. Not just the US. Maybe if people who drove minivans would remember that they are driving a minivan and not a BMW there would be fewer accidents. Unless you have a sport truck like a Ford Lightning or something, trucks are made for pulling and utility. Most trucks have a large amount of torque, not a large amount of top speed. Too many people want to drive fast these days and don't have the right vehicle, horsepower, or good brakes to do it. Stop trying to be Mario Andretti in your Tahoe, your minivan, your corolla, or your truck. The hiways and interstates will be a lot safer.
[1 2] next
Commenting is open from 8 a.m. to 5 p.m. M-F, except on Tuesday when it's open until 9 p.m.
Post a comment
*HTML not allowed in comments. Your e-mail address is required.