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Cash for Clunkers to keep on rolling

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WASHINGTON (8/10/09)--Buyer response to the Cash for Clunkers program exceeded expectations--the appropriated $1 billion disappeared in just a few weeks--and legislators have just approved an additional $2 billion to keep the program rolling. The refueled funds are expected to last through Labor Day (Washington Post Aug. 7). Cash for Clunkers, the government-funded Car Allowance Rebate System (CARS), began July 1, and funds were expected to last until Nov. 1. Under the program, consumers can trade in old cars for new--not used--more fuel-efficient models and receive a $3,500 or $4,500 voucher. The value depends on the mileage improvement of the new vehicle. To participate, your trade-in must meet specific requirements. You can find the most detailed requirements at, the only official government site for the CARS program. July new-car sales were the highest the industry has seen since August 2008 ( Aug. 3). Car dealers, sitting on piles of inventory, are thrilled consumers are reacting to the program. The vouchers offer a good deal to many, but consumer advocates are encouraging potential buyers to think carefully about the costs of owning new car. Ask yourself several questions before buying:
* Can you afford the new-car payments? Because of the recession and high unemployment, some buyers may sign a contract they don’t have the money for. * Will your insurance costs change? Keep in mind that they may go up or down, depending on the new model. * Do you know whether the new car you’re considering is reliable? has a section dedicated to the Cash for Clunkers program. Find a list on its site of “Recommended cars that qualify for a voucher”--models that meet program requirements and also score well in safety and reliability testing. * Are you dealing with a reputable CARS program dealer? Scam artists already have created bogus websites to take advantage of unsuspecting consumers. A site requesting your name, address, account details, Social Security number, or other personal information for voucher registration is likely a fraud. The CARS program requires no pre-registration and will never request information from individual consumers--all transactions go through the dealer (FTC July 28). Find registered dealers in your area using the dealer locator at * What is the trade-in value of your old car? If the trade-in value is more than the CARS voucher amount, take that instead. You cannot receive both the voucher and the trade-in value for your vehicle. has a list of cars with values less than $4,500--check if your trade-in is on the list. * Have you done your car-buying research? You can find new car-buying advice on and by searching other auto sites, such as,, or If you decide to make a purchase, gather pricing information before hitting the dealerships. And, see the professionals at your credit union for assistance. They can help you evaluate your financial situation, pre-approve you for a car loan, and answer any questions you may have.
For more information, read “Understand Clunkers Program--Vouchers for Fuel-Friendly Cars” in Home & Family Finance Resource Center.