by Danielfb

Created on: September 01, 2009   Last Updated: September 02, 2009

The cash for clunkers program has temporarily jump started the auto industry, however the cost tax payers share to fund this program will outweigh any benefit it produces. Already the clunker complaints are pouring in. Congress cannot read bills before they pass them, apparently customers shopping for vehicles do not read what they sign either. People were surprised and angry when they learned that the $4,500 they received for their $500 clunker would count as income when tax time arrives. The Governments slow response towards payments prompted auto dealers to complain and scrap the program before its end.

Cash For Clunkers official name is Car Allowance Rebate System (CARS) ended on August 24, 2009 8:00 PM. The program allowed individuals to trade in gas guzzling, low efficient, and air polluting vehicles for brand new high efficient gas saving clean air vehicles. Certain qualifications restricted the number of people allowed to participate in the program. (CARS) was enacted on June 24, 2009, as part of President Obama's stimulus program to jump-start the economy. The program, scheduled to end November 1, 2009, or until funds ran out, apparently ran out of funds on August 24, 2009. The early exit was after congress added 2 billion dollars totaling 3 billion dollars for the entire program.

Hundreds of thousands of people responded to the program, and drove their clunkers to the Dealerships. Many were unaware of the fact that Dealerships needed to apply for the program and found no cash for their clunker. Dealerships that applied and qualified were not prepared with inventory demands. Certain clunkers meant certain trade-ins. SUV clunkers had different restrictions than car clunkers.

Here is how the program worked. If your trade-in clunker had a rating of 18, MPG (Miles per Gallon) or less, than you must purchase a new vehicle rated at least 22 MPG. If the new vehicle got 4-9 MPG more than the trade-in you would receive a $3,500 credit towards the new vehicle, if the new vehicle got 10 MPG or more you would receive a $4,500 credit towards your new vehicle. Category 1 trucks SUV, Pick up Trucks and Passenger Vans with 8,500lb GVWR or less received $3,500 towards a new vehicle with the rating of 18 MPG. If the new vehicle rated at 22 MPG, the lucky clunker would be worth $4,500. Category 2 trucks vehicles 8,500lb GVWR or less with a wheelbase greater than 115 inches (Ford F150-Chevy Silverado) needed to purchase a new vehicle rated at 18 MPG to qualify for $3,500 credit, if the new vehicle rated 2 MPG more than the trade-in, you would receive a $4,500 credit towards the new vehicle.

Dealerships and automakers can keep this program going by offering a scaled down, less complicated version. People will trade in their clunkers if they can get $1,200 for a $500 dollar car. Taxpayers do not need to pay $4,500 for a $500 clunker. The program can only fail if the jump-start they were hoping for stalls.

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