Cash For Clunkers? Not Law Yet!

This past April, SayEducate.Com made mention of the federal government’s “Cash For Clunkers” program, a plan where car buyers would be able to trade in their older, gas guzzling models for new, more fuel efficient vehicles. That program has been debated for several months now, but the U.S. House of Representatives finally passed the bill on Tuesday (H.R. 2751) which means that the legislation will now be taken up by the Senate.

Should the U.S. Senate decide to pass a similar version of the bill, it’ll go on to the executive branch where President Obama has promised to sign it into law. Though it may take a few months before it kicks in, “Cash For Clunkers” could bring significant savings to the consumer who is planning to buy a new car. However, before that happens, there are a few things you should know about the program before you decide whether to participate or not.

Cash For Clunkers: A Primer

As it stands right now, the following are the highlights of the Cash For Clunkers program:

Poor MPG Vehicles Only — Unless you have a vehicle that gets worse than 18 mpg, you cannot trade in your old car and get the credit which reportedly will be between $3500 to $4500. A few newer vehicles like the Hummer, qualify, but you’ll want to skip this program if the residual value of your trade in is greater than the credit offered.

Scrapped & Gone — Whatever vehicle you own, it will no longer be used meaning when you turn it in, it’ll be sent to the scrap yard with perhaps some of its parts recycled.  You may not care what becomes of your vehicle at trade in, but if you’re hoping that it will be reused, it won’t be.

Registered & Insured –  Don’t think for a moment that the beater you have sitting on blocks in your back yard qualifies. Unless, of course, you have had it registered and insured for the past year. The federal government isn’t going to take your junker unless you’ve been paying insurance on it and it has been registered with the state.

Lots of people who have been waiting for this bill and holding off on their new car purchase will be disappointed if the House bill becomes law with no changes to it. With so few vehicles eligible and trade in values not making it worthwhile for newer vehicle owners to trade in, there is a good chance that the four billion dollars that Congress has allocated for this program may never be completely used.

Then again, we’re talking about the federal government which has shown an awful habit these past several years of spending whatever money they can get their hands on while offering assistance programs that don’t go far enough or are ill-advised in the first place.

Source: Auto Trends

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Tags: cash for clunkers, Congress, federal government, new cars, President Obama