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Preliminary rules for the CARS act – which was known as the Cash for Clunkers bill and is now more officially known as the CAR Allowance Rebate System or the Consumer Assistance to Recycle and Save Act of 2009 – were released by the Federal government today. Automakers have been busy doubling the rebates and emphasizing the green results of the bill, but today was the first chance to see exactly how CARS will work. It's about time.
Most of the work is the responsibility of the dealers selling the cars. This makes sense, since the law was passed, in part, to help them. Dealers can find a nearby facility to scrap the cars that are turned in from the CARS website, and need to confirm with the scrappers directly that they can crush or shred the vehicles. Dealers must also do things like disable the engines of the cars coming in, as described on page 127 of the 136-page rulebook (PDF), and have seven days of accepting a trade-in vehicle to get paperwork – a lot of it – to the government in order to receive their money.

Customers are responsible for bringing in an old "clunker" that gets, at most, 18 mpg (thanks, charities) and buy a new vehicle with better mpg. It looks like it might be possible to get more than $4,500 for your trade-in, because any scrap value that the trade-in has can be added to the rebate.

Not everyone is pleased with CARS. The Automotive Aftermarket Industry Association (AAIA) released a statement, available after the jump, saying they anticipate "a consumer backlash once reality replaces the hype." There won't be that much time for the hype to die down, though, since the CARS program is currently scheduled to end on Nov. 1, or when the $1 billion set aside for the program runs out (it could be extended). We'll see.

[Source: Automotive News (sub. req'd), CARS.gov, AAIA]


AAIA Predicts Consumer Backlash on 'Cash for Clunkers'

BETHESDA, Md., July 23 /PRNewswire-USNewswire/ -- As new car dealerships ramp up advertising to attract consumers to the showroom using "Cash for Clunkers" as an incentive, the Automotive Aftermarket Industry Association (AAIA) anticipates a consumer backlash once reality replaces the hype.

"It wouldn't surprise me if there is a consumer backlash once car owners realize that 'Cash for Clunkers' is nothing more than a clever slogan for a program to spend $1 billion of our tax dollars to fund a government subsidized vehicle trade-in to help new car dealers sell cars," said Kathleen Schmatz, AAIA president and CEO. "Consumers will soon learn that they are simply trading in their vehicle and will still have to jump through all of the hoops to qualify for and purchase a new vehicle."

The much heralded fuel efficiency and environmental benefits of purchasing a new vehicle could easily be achieved through better maintenance of an existing vehicle or trading up to a newer used vehicle, according to AAIA. Any savings from improved miles per gallon will be lost from the costs involved in destroying and disposing of the "clunkers."

AAIA has strongly opposed "Cash for Clunkers" that prematurely destroys vehicles and their valuable parts and components. "Destroying vehicles with many more years of life denies consumers more affordable used vehicles and pulls vehicles from the aftermarket supply chain," said Schmatz.

The Consumer Allowance Rebate System, the official name for "Cash for Clunkers," offers vouchers up to $4,500 to new car dealerships for consumers who trade-in their vehicle for a new, more fuel-efficient vehicle.

About AAIA

AAIA is a Bethesda, Md.-based association whose more than 23,000 member and affiliates manufacture, distribute and sell motor vehicle parts, accessories, service, tool, equipment, materials and supplies. Through its membership, AAIA represents more than 100,000 repair shops, parts stores and distribution outlets.

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    • 1 Second Ago
      • 6 Years Ago
      This is somewhat rediculous. I cannot trade in my 21-mpg maxima for a 34-mpg Fusion, but I could trade in a 18mpg clunker for one that gets 22. Which of the two saves more fuel? The requirement for an improvement in economy makes sense, but limiting the origional to 18 cuts out a lot of potential gain...especially for me.
      • 6 Years Ago
      My sister bought a new mazda 3 today under the program. The dealer took 1,800 off before even counting the other 4,500 so they got a good deal. They traded in a 1997 jimmy that had about a 16 or 17 mpg average and was worth maybe a couple of thousand if that. They got a car that stickered for a little over 19,000 for 12,700.
        • 6 Years Ago
        I did forget to mention that they aren't picking it up till monday And a couple of dealers we talked to both had 25 cars they were holding , for people with down payments to hold them until everything went thru. I think the money will go fast.
      • 6 Years Ago
      oh nevermind, has to be listed under your name for insurance and registration for one year...i guess that means i can't buy a cheap pos to trade in.

        • 6 Years Ago
        Just use the cars.gov site at this point, it's where the official rules are.

        The most general rules on ownership, outside of the 18 mpg and lower requirement are:
        * The trade-in is in drivable condition.
        * You are the registered owner, and have been for the least the last year.
        * The trade-in has been continuously insured for the last year.
        * The trade-in is titled in your name and has been for the last year.
        * You have not previously participated in the CARS program.

        Note, the person who owns and registers the vehicle doesn't have to be the same person that is the primary driver/has insured the car, as long as it's been insured for the past year continually.
        "The Act’s one-year insurance requirement is satisfied so long as the trade-in vehicle is insured, irrespective of the identity of the person holding the insurance policy."
        • 6 Years Ago
        JG, now your looking for wiggle room. Sorry, you can't negotiate with the goverment dude, good luck with that one.
      • 6 Years Ago
      I'm fully ready for the local dealers to try desperately to use the C-4-C rebates to offset their own rebates. You give 'em an inch, they take a foot. I'm planning on not mentioning anything about a trade-in before all the other negotiations have been taken care of.

      And what's this about adding $$$$ to the trade-in if it has scrap value? Every car has scrap value. How does one figure out how much scrap value his car has? What's kind of price would a 1990 BMW 525i have in scrap?
        • 6 Years Ago
        I imagine scrap value varies from dealer to dealer, depending on who they are selling the scrapped cars to. I did read that the dealers are allowed to keep up to $50 of that, so I don't see a reason for them to be dishonest on the true scrap value.

        So is it acceptable to take your car to the scrap yard ahead of time and sell them every seat but the driver seat, as well as any other parts that aren't necessary for safety/regulations, which will allow you to drive to the dealer? ;)

        I'm thinking, sell the spare, right side mirror, air conditioner compressor, air bags, and you could make a little cash on the side.
        • 6 Years Ago
        Dude, stop whining. If you love your 90 BMW so much see if you can sell that sled and get more than $4,500. Are you paid to whine? Oh that's right, if you did you wouldn't be griping about a couple of hundred dollars because you would be independently wealthy.
      • 6 Years Ago
      LOL, it is still in legislation.
      • 6 Years Ago
      really? you guys are going to announce the CARS program by carrying a press release for an industry group that has an obvious incentive to stop people from buying new cars? did the AAIA pay you to publish this?

      at the very least, this is shoddy journalism. at worst, it stinks of corruption.
      • 6 Years Ago
      Cash for Clunkers is a bad idea that reeks of pork like every other half-measure enacted by Congress over the years. If you want to buy a used car, you get zilch. And to qualify, you have to own a real guzzler like a Suburban or Ford Super Duty. Anyone trading in their Camry will be sorely disappointed.

      People are better off donating their clunkers to charity and buying used vehicles. You'll save money, help a worthy cause and there there are no restrictions, unlike the ham-fisted government approach.
      • 6 Years Ago
      The website to check to see if your car qualified and the one the dealers needs to register on WERE ALL DOWN/CRASHED YESTERDAY since so many dealers were on them. and Obama thinks he car fix health care, that fool cant even have a website made that doesn't crash all day long!!!

      what a joke!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!
      • 6 Years Ago
      I have a 1991 Camry v6 automatic

      When I checked fueleconomy.gov a few weeks ago, my car qualified (18mpg combined). I went to a dealer about a week and a half ago getting ready for the program to start... they verified that I qualified.

      I went in today to buy a car... the salesman went to print out a copy of the fueleconomy.gov page for the paperwork... and today it says 19mpg!
      The official CARS calculator says I don't qualify... the Ford one that was created a couple weeks ago still says 18mpg....

      The EPA changed the rating for my car sometime in the last week and a half. I was going to buy a Prius, but without the $4500 it is not the right time for me to buy.
      • 6 Years Ago
      How do you determine the mpg of your clunker?

      If it was rated 20mpg in 1998, it probably gets 16 today! Are they testing or going by the original number?
        • 6 Years Ago
        They go buy the current combined MPG number (done under the new way of calculating it) that is shown at fueleconomy.gov.

        Basically, go to fuel economy.gov and look up your car. The number in red is what counts.
      • 6 Years Ago

      My wife wants to know if President Obama's "Cash for Clunkers" program is also part of his new national health care plan. She muttered something about my crappy beer consumption......
      • 6 Years Ago
      i just saw an ad for fords and the c4c program... they ended by trying to sell a full size f150.... what? so much for making the roads more efficient.
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