Rules for CARS, the cash for clunkers bill, released
by Sebastian Blanco on Jul 24th 2009 at 4:27PM 
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 (subs req'd), CARS.gov, AAIA]
PRESS RELEASE:
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.
Reader Comments (Page 1 of 1)
Yanquetino 4:54PM (7/24/2009)
The program is to end November 1, 2009, or when the cash runs out, whichever comes first? Utter greenwashing then.
Those of us who have sworn "No Plug? No Deal!" will obviously not be able to take advantage, since no major auto manufacturer will have an EV in the showrooms in only three months. Sounds to me like the government wants to keep drivers addicted to crude: they are offering us this carrot so that we'll buy a new ICE now instead of waiting for a zero-emissions vehicle later.
Reply
eb 5:25PM (7/24/2009)
Can consumers bring in a clunker when buying a new NEV (i.e. GEM Car)? Or, are NEVs not on the list of eligible new cars?
chauvinist pig 5:27PM (7/24/2009)
Why not take advantage of a higher trade in value of your car than otherwise attainable, get a hybrid, then use the hybrid as trade in when your plugs are available?
That way your 18 MPG or less ICE is no longer on the road while you wait for a holy grail with no ETA?
locoyocal 7:17PM (7/24/2009)
Not really. Government wants to just give $4,500k per car to auto manufacturers.
They have brick-loads of cars on the docks that would otherwise have to be scrapped or sold at a deep discount.
This program just provides the image that the government is actually saving money for people.
locoyocal 7:24PM (7/24/2009)
here are some pictures of the cars being stored. (January)
http://www.guardian.co.uk/business/gallery/2009/jan/16/unsold-cars?picture=341883529
dg 11:20PM (7/24/2009)
Well, whatever you believe about the program, it's HAPPENING, so look away and shut up, or take advantage of it while you can.
The rebate is your money anyway, why not get it back?
Reply
nrb 2:05PM (7/25/2009)
That's kind of my attitude. I HATE the program, but it's here.
My biggest problem is that I don't think I can get my better half to give up the 12 year old SUV.
coyo t 11:53AM (7/25/2009)
Can folks buy a more fuel efficient used car? A used car is always better for our environment.
Reply
Seth 12:55PM (7/26/2009)
Sure they can, they just can't use the bill to do it. You are probably better off getting the cash for your used car and then buying another used car as you spent less money.
I think the bill would be more attractive if the funds were double. $4500 is not a lot of money when new cars are over $20k and closer to 30k (assuming you are replacing a family sedan with another, or a van with another). You won't be moving 'new' metal as the incentive is too low, and it is better to just trade in your vehicle for something used.
Ghen 3:53PM (7/27/2009)
These rules are absolutely crazy for dealerships. Getting as much paperwork as the government wants scanned, sent, and received in 7 days is a logistic nightmare because there's absolutely no infrastructure in place for this.
Reply