'Cash-for-Clunkers': What You Need to Know Now
The government's cash for clunkers program has been so popular that the $1 billion fund set aside to pay for it has nearly dried up. With the chance to take up to $4,500 off the sticker price, buyers have flooded dealerships to trade in gas-guzzlers for new cars with better gas mileage.
So if you didn't make it to the dealer last week, have you missed your chance for the cash—and are you stuck with your clunker?
Congress is working on a plan to extend the program, but whether any extra money will be pumped in is still unknown. While lawmakers haggle over the details, here are some questions and answers about what you should know if you still want to buy a car under the program.
Q: Is cash for clunkers still on? Can I still qualify?
A: According to the government, yes. But for how long remains unclear.
There's been a lot of confusion about this, especially after the news came out late last week that the program was running out of cash. The Obama administration says sales made under the deal are still covered for now, but the government is waiting to see what Congress does before making any concrete promises.
The House voted last week to add $2 billion to the program, and the Senate is expected to take the same bill up this week. If the Senate doesn't approve it by Friday, the program will probably end.
And remember, the program still has restrictions, like the vehicle mileage of the car you are trading in. The government Web site has all the details.
Q: What will happen when I go to the dealer? Are they still offering the deals?
A: It depends on where you go.
Some dealers stopped making cash for clunkers deals Monday, fearing they could lose money. Under the program, dealers take the value of the rebates, which range from $3,500 to $4,500, off the price of the car. They then go to the government to get reimbursed for that amount. As a buyer, you don't have to do anything. You get the credit when you buy the car. So all the risk is on the dealer.
Many are still offering the deals on Monday but say they're still not sure about the rest of the week. Others are making only verbal deals that will go through if more money comes into the program. Some are telling buyers they'll have to bring their new cars back or pay back the rebate if their applications are rejected when they are submitted to the government. And some dealers are holding off on sending trade-ins to be scrapped, just in case the deals don't work out and the buyers need their old cars back.
Q: Will I still be able to find the car I want and get the credit?
A: If you've had your heart set on that cherry-red Focus at your local Ford dealership, you should probably act fast. Dealers say their inventories are running low because of high demand under the program.
Usually, a dealer can find you a car from somewhere else if the cars on the lot don't fit your tastes. But with so much uncertainty over how long this will last, some dealers are saying they may not be able to fulfill specific buyer wishes, like color and interior, and still offer the credit.
"If you want a green car with a blue interior and we can't find it, we're not going to do the deal today," said Jeff Crippen, owner of a Lansing, Mich., dealership that sells Buicks, Pontiacs, GMCs, Mazdas and Volvos.
Q: What are the chances the program will be extended the way it is now?
A: The House version would for the most part just add new money. But the Senate may tinker with the program, like by raising the fuel economy requirements for cars to qualify for the rebates. Of course, any Senate changes to the bill would require the House to take up the issue again—and they went out on summer recess last week, with no plans to return until September.
How's it all going to shake out? Stay tuned.