'cash for clunkers' program. How does this work?

[KMPrenger]

Anyone out there know much about the proposed 'Cash for Clunkers' bill that just passed through the house? Ive done some reading up on it, but I'm not positive I completely understand it.

A fairly explainatory article is found at this link.

A small portion of the article states:

Q: If the House bill becomes law, how would it work?

A: The government would send up to $4,500 to the selling dealer on your behalf, if you:

1. Trade in a car that — this is a key point — has been registered and in use for at least a year, and has a federal combined city/highway fuel-economy rating of 18 or fewer miles per gallon.

2. Buy a new car, priced at $45,000 or less and rated at least 4 mpg better than the old one (gets a $3,500 voucher). If the new one gets at least 10 mpg better, you get the full $4,500.

Example: Trade that well-worn 1985 Chevrolet Impala V-8 police special, rated 14 mpg, for a 2009 Impala V-8 rated 19 mpg and the government will kick in $3,500. Downsize to Chevy Cobalt (27 mpg) or even a larger Honda Accord (24 mpg) and get $4,500.

I've also read and seen on TV that the dealers will take these trade ins, and then send them off to be "crushed"...dissmantled...so the 'gas guzzling' vehicle won't ever be used again.

So for example, does this mean that I couldn't trade in something worth 10 to 12K on a car, and get the 3500 or 4500 on top of that? (I can't imagine so, if the dealer HAS to send the trade in off to a junk yard) Does this basically only apply to cars worth 3 or 4 grand or less?

[DEW]

If its worth 10 - 12 grand, its not a clunker. Its for vehicles only worth 3 to 4 grand because that all your gonna get.

[Zabo]

Might be able to do that on the Explorer. 15/19mpg.

2LT: 18/29mpg - 5000 trade in plus 4500..

1SS doesn't qualify because it's only 3mpg better. -_-

[PQ]

Originally Posted by KMPrenger

So for example, does this mean that I couldn't trade in something worth 10 to 12K on a car, and get the 3500 or 4500 on top of that? (I can't imagine so, if the dealer HAS to send the trade in off to a junk yard) Does this basically only apply to cars worth 3 or 4 grand or less?

I've wondered about this so I took some time and read up on it. I never bookmarked the pages so can't remember all the references but you are correct.

If your trade in is worth 2000.00 then you go with CFC. If your vehicle is worth 6000.00, you just take the 6 grand and the dealer sells the car.

Oh, and if you go with the CFC, that's one less car that the local mechanic will never be able to make a living off of fixing. But that's not what this thread is for so..............

[PQ]

Originally Posted by Zabo

Might be able to do that on the Explorer. 15/19mpg.

2LT: 18/29mpg - 5000 trade in plus 4500..

1SS: 17/24mpg - 5000 trade in plus 3500..

Hmm..

Your NOT gonna get both. No dealer is gonna give a trade in worth, and then send it to the crusher. They'll take the higher amount.

[KMPrenger]

Thanks DEW and IRPQ11....thats what I had figured, but wanted to know forsure before just missing a good opportunity.

So I guess for people out there didn't have anything to trade in on a new camaro cept their old yard ornament, if this passes it could make it worth their while! I know I'd be excited if I still had my old chevy to trade in, and get that on top of the cash I'd be putting down.

[Mr_Draco]

Originally Posted by KMPrenger

So for example, does this mean that I couldn't trade in something worth 10 to 12K on a car, and get the 3500 or 4500 on top of that? (I can't imagine so, if the dealer HAS to send the trade in off to a junk yard) Does this basically only apply to cars worth 3 or 4 grand or less?

No you do not get both the trade in and the extra $3,500-$4,500.

Also it only qualifies for vehicles that are built in plants located in the US. The Camaro is built in Canada so it does not qualify.

There is also a minimum age that the vehicle being crushed has to be. It's either 10 or 15 years, I can't remember which one as it's changed several times before it was passed.

[PQ]

If nothing else, it's assures you that you will have NO less than 3500.00 coming at trade in time. My 2003 Jeep liberty is in FANTASTIC shape and never had a problem with it but only would get about 3000.00 in trade in. I know i would get no less than 3500.00, wether from the Gov. or the dealer.

It actually gives us some leverage as far as that goes. The dealer would be more likely to give me the extra money because he knows he could sell it for 5000.00

[PQ]

Originally Posted by Mr_Draco

There is also a minimum age that the vehicle being crushed has to be. It's either 10 or 15 years, I can't remember which one as it's changed several times before it was passed.

Well so much for my Jeep example.