Will a Cash-for-Clunkers Program Work?

U.S. Program Has Many More Restrictions than its Successful Counterpart in Germany

(CBS)  In Germany, it worked like a charm - a program to give consumers cash for their old clunkers took gas guzzling cars off the road, and boosted new car sales in Germany by 40 percent, reports CBS News correspondent Randall Pinkston.

But here in the U.S., a similar cash-for-clunkers program is more complicated. Dealers like Jim Russomano in New Jersey say it may not be as effective as Germany's in driving up sales.

"The restrictions are much more severe than I thought they would be," said Russomano, the owner of Nutley Chevrolet. "I thought it would be a lot easier to take some junkers off the road but it's not going to be as easy as I thought."

Germany spent $5 billion to buy back cars. A clunker was defined as any car more than nine years old. Turn one in for scrap and you'd receive the equivalent of $3,300 dollars towards a new car.

The U.S. allocated $1 billion for its program - Car Allowance Rebate System (CARS). Car buyers who qualify received $3,500 or $4,500 towards a new car.

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Click here to find out if your car's gas rating qualifies as a clunker
Click here for general information about the program

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But the qualification for "clunker" isn't easy. It's based on an EPA gas mileage rating of 18 miles per gallon or less when the vehicle was new.

So a 1989 Buick Regal, a 20-year-old car, does not qualify as a clunker, beause it was sold with an EPA rating of 21 miles per gallon. But a 2000 Ford Windstar, only nine years old, does qualify because its original gas mileage was only 17 miles per gallon.

"I think that more than 50 percent of the people will not qualify for any of the vouchers because their vehicle that they're looking to get out of exceeds the 18 miles per gallon," Russomano said.

And there are more rules: the vehicle has to be less than 25 years old, in drivable condition, and registered and insured by the same owner for a full year before trade-in.

"We estimate that about 150,000 people will take advantage of this deal," said Rebecca Lindland, the director of the Autos Group at HIS Global Insight in Lexington, Mass. "It seems like a good idea except when you really go and try to qualify for it you don't."

For car owners able to meet the requirements, there's only one more wrinkle: while the program took effect on July 1, the rules won't be in place until July 23. To find out if you're car's gas rating qualifies as a clunker, click here and for general information about the program, click here.

[jhenry1807]

so if you have two or more clunkers at your house you cannot trade both of them for one car. The program is for one per
person.


Jimhenry
Blogger
www.cashforclunkersfacts.info
http://www.cashforclunkersfacts.info

[fleabag75]

One must check the 'official' web-sight for mileage. Believe it or not a lot 'stickers' lied back then.(yeah, who would believe) Also, I did indeed already take advantage of the program and like it or not, I consider it my personal little piece of an AIG bonus! That's the only bail-out I'll be getting.

[bugbyyy]

This reporter is WRONG!, It is the NEW EPA rating of the old car, not as it was sold!

[rdupuy11]

Why don't reporters ever do anything useful?

I read the article, I visited the link. I still don't know if my vehicle qualifies. Is it the combined City/Highway, is it under the new EPA calculations or the old?

You say the 2000 Windstar qualifies, but it has a Highway over 18 mpg...did you calculate your own Highway/City combined rate that the website absolutely does not display for 2000 model years? If so, did you use a 50/50 ratio?

Why did you suggest the website tells you if you are qualified or not, when it does not?

[grabandgo]

How about GM built better quality cars. Clunkers? Vega Chevette Pontiac Fiero for a few.
The auto industry and unions created this mess, not us.
We don't need to fund buying cars with more tax dollars!

[cecil1961]

it was a good idea to start, but as usually our government takes a good idea and screws it up. I have a clunker but have only own it for 7 months, I would buy me a new car, but I can't because I have only had it for 7 months. Again, how stupid, most clunkers I have own dont even last a year.

[whatsup49]

my 10 year old saturn won't qualify even though my actual mileage now is about 16 city miles and 19 highway miles. i've kept the car maintained, but the mileage just keeps on dropping. but because of the way this program is designed that car won't qualify, but my friend's 2-year-old gas guzzeling suv does. this just stinks.

[Bobthefirst]

If it makes you feel any better, your friend's two year old vehicle doesn't qualify, either. Vehicles have to be model year 2001 or earlier to be eligible for trade-in under this program.

I can sympathize with your plight, however. My wife and I have a 1999 Buick Regal that gets far less than 18 mpg, but is rated at 21 mpg according to the government. We don't qualify, either.

Frankly, it wouldn't matter if we did; this money was confiscated by force from people who earned it, and is being given to people who didn't work for it at all. It's redistribution of wealth in the purest form, and it's wrong.

[bill517]

Classic example of govt screwing around where it doesn't belong. Be much more effective to just hand the cash over to the UAW.

[vietnamwar]

Germany spent $5 billion to buy back cars. A clunker was defined as any car more than nine years old. Turn one in for scrap and you'd receive the equivalent of $3,300 dollars towards a new car.

The U.S. allocated $1 billion for its program -

We are so Broke because of OBAMA TRILLION DEBT..

[Newster1]

We are so Broke because of OBAMA TRILLION DEBT.."

He's not the one who DOUBLED the debt from 5 trillion to over 11 trillion in 7 years, threatening other countries, including Russia and almost restarting the cold war, threatening Iran etc and destabilizing oil prices due to that- effectively trippling the price we pay at the pump.
That in turn caused the economic collapse and unemployment we are seeing now, it is Obama who is trying to clean that mess y our buddy king george hte last made.

[vietnamwar]

Yep, the restricted program will not work here in the US...Dump policy..people have an old Honda can't not trade in .....

[Bobthefirst]

Nobody denies that Bush spent a lot of money when he shouldn't have. To do so would be ludicrous. That being said, Obama passed (in his first year of office) a budget larger than any of Bush's - including the war spending. That doesn't account for the $1,300,000,000,000 porkulus package he passed, too. Since that package was such an abysmal failure, there is now talk (still in the first year of office, mind you) of another porkulus bill. When it comes to budget deficits, people in glass houses should forget about the existence of rocks.