Consumers Warned In Advance Of Clunkers Program Start

The ink wasn’t even dry on the “cash for clunkers” bill that President Obama signed into law when word came out that scams were already taking place. It seems that some enterprising people were creating informational websites about for the Car Allowance Rebate System (CARS) program, seeking to secure confidential information from shoppers including their social security numbers. Those scams have caught the attention of consumer activists who are warning people people to be careful.

Beware of Identity Theft

Car manufacturers are preparing customers in advance of the program’s start date which hasn’t been established yet as Congress fine tunes the requirements. But, opportunists are already at work trying to get people to “register” for the program a step that isn’t part of the program requirements. Consumers who inadvertently give their personal information out are at risk of losing their identity, money and maybe more.

The CARS program is a six step process involving the following:

1.Check the www.cars.gov site for updated information. This is the only site consumers need to go to in order to keep updated.

2.Next, consumers should see if their cars are eligible for the program. Models must be no older than 25 years old at time of trade in date and they must get 18 mpg or less with slightly different requirements for large pick up trucks and large vans. As long as your car has been continuously insured and registered over the past year and you plan to purchase or lease a new car, then you should be eligible as long as all of the other requirements have been satisfied.

3.When you go to the dealership, you’ll need to bring your title, registration and proof of insurance with you.

4.You do not need a voucher in order to get your rebate as dealers will apply a credit at purchase. The NHTSA (National Highway Traffic Safety Administration) will confirm that your car qualifies after the sale which means if there is any mistakes that error will be on the dealer’s shoulders not yours. About ten days after the sale, the NHTSA will issue a financial credit to the dealers as long as all requirements on the dealer’s end have been met.

You can sign up for program updates through the Cars.gov website. Simply give them your email address and when you receive a confirming email from them, hit the confirm subscription button and you’ll be taken to a page on their site with their logo and a message saying, “Your subscription has been confirmed. Thanks!”

Cash For Clunkers Doesn’t Go Far Enough

I am not one for seeing the federal government create endless taxpayer assistance programs, believing that the consumer is the best party to determine what he or she should buy. However, I’ve resigned myself to seeing Congress and the Obama administration spend money like no administration before it, supposedly in a bid to rescue us from the current economic slump or to pass new programs designed to expand government control.

Older models like the Ford Bronco may qualify under the federal government's Cash For Clunkers law. However, your old ride must be scrapped or recycled and you'll get just $3500 to $4500 toward a trade in.

Cash For Clunkers is one program that I want the federal government to spend money on for the simple reason they have been spending money everywhere else, but with little impact on the economy. Any program that actually puts cash in the consumer’s hand is better than tossing those funds at bankrupt financial institutions, car companies and other larger businesses who have failed. At least with the consumer you have someone who isn’t as likely to squander their monies, carefully choosing what they want to buy and how much they’ll pay.

House Bill Doesn’t Go Far Enough

However, I am disappointed by the Cash For Clunkers bill (H.R. 2751) that was passed by the US House of Representatives yesterday, one that will barely have an effect on the auto industry. True, eligible buyers will be able to use a voucher worth $3500 to $4500 toward the purchase of a new, fuel efficient vehicle, but the vehicle they must trade in has to get under 18 mpg.

Consider this — over the past decade or so, there have been only a handful of vehicles that return such awful gas mileage. Heck, even some editions of the Corvette get up to 28 mpg on the highway! Sure, a few newer models like the Ford Excursion and Hummer H2 qualify, but if you think that someone will trade these vehicles in for a paltry credit, that’s crazy.  After all, qualifying vehicles must be scrapped or recycled and no additional monies will be given even if the book value is well above $4500 as it is for some newer versions of these models.

Your Dead Clunker Doesn’t Qualify

Lest you think that you can take that beater sitting in your back yard and trade it in, you’ll need to think again.  An important requirement with this program is that vehicles must have been registered and insured for the past year to avoid having people push in inoperable cars for credit.  Congress may have set aside four billion dollars for this program, but they’re not about to let unregistered and uninsured junkers qualify which is actually a good thing.

There is a chance that as the U.S. Senate takes up this bill, that some of the parameters will be changed. I believe sales would be stimulated if just about any older vehicle, let’s say eight or ten years or older was included in this program. As it stands right now, the law will provide a little bit of help, but nowhere the results that Germany and other European countries have experienced since launching their own scrappage programs earlier this year.

Cash For Clunkers is one of the better ideas floated in some time. I only wish that our elected representatives planned to offer one that would truly stimulate the economy as this version of the bill will have little or no effect.

Source: Detroit Free Press

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