Cars Under

There has been quite a buzz around the Cash for Clunkers program lately and many owners of older used cars have taken the United States government up on the offer.

The official name of the Cash for Clunkers bill is actually CARS which stands for Car Allowance Rebate System and originally had been allocated $1 billion dollars to entice owners of older used cars to trade them in on new vehicles. The idea being that this would create some activity in a slow economic climate and at the same time remove several not so fuel efficient vehicles from the roadways.

Many people criticize the Cash for Clunkers program because it is a temporary and unnatural economic stimulant program which in reality creates more debt for the American citizens in the form of new car and interest payments and the fact that every citizen will play a role in footing the bill for this program through higher taxes.

On the other hand new car dealers have been enthusiastically welcoming the Cash for Clunkers program because it is generating much needed sales for them. It is only natural that people will become more interested in purchasing something when a large portion of the purchase price is going to be paid by someone else.

The original Cash for Clunkers program was designed to run from July 1, 2009 through November 1, 2009 or when authorized funds became unavailable. Those whose vehicles qualify would receive a government backed credit of either $3,500 or $4,500 in exchange for a qualifying used car trade-in only to be used for the purpose purchasing or leasing a new vehicle.

There are several specific qualifications which must be addressed in order to qualify for the Cash for Clunkers program. For example the used car or truck must be less than 25 years old at the time of the trade-in. The used vehicle is required to have a rating of getting 18 miles or less per gallon of fuel yet some larger trucks and cargo vans have differing requirements.

In order to prevent someone from going out and buying a literal clunker from a junk yard for example and flipping it for the rebate there is a stipulation which in essence says that the used vehicle must have been registered and insured continuously for the full year up to the date of the trade-in transaction. In addition the used vehicle must be in drivable condition.

An eligible used car will be required to be scrapped after it is traded in through the Cash for Clunkers incentive program. The new car dealer is required to provide an estimate of the scrap value of the used vehicle and this will be added, however minimal, to the rebate amount.

Motorcycles are not eligible under the terms of the Cash for Clunkers bill. The owner must have a clear title with no liens and this title must be presented to the dealer at the time of the trade-in. Also, the person whose name is on the title of the used car must be the actual individual who is purchasing the new car.

Overall the Cash for Clunkers program is good for the auto industry as it provides sales. This provides an opportunity for the owners of used vehicles to get a break on the price of a new vehicle by using their trade-in. Many people have the opinion that the best car is one that is paid for and the taking on of even more large debt by consumers is not good for the economy in the long run. As of early August 2009 consumers are still checking out their options with this particular incentive in mind.