Cash For Clunkers Extension Awaiting Senate Approval 

(LOS ANGELES, Aug. 3, 2009) The federal government’s “cash for clunkers” program is waiting for the Senate to thumbs up this week a $2 billion extension so the program can continue through September, according to White House officials. The rebate program is thought to be out of cash, but has lifted car sales and pleased consumers seeking fuel efficiency.

During July when the program went into effect, the average fuel economy of vehicles purchased through the clunker program was 9.6 miles better than the old gas-guzzlers traded in and 80 percent of the trade-ins were SUVs and pickups. Car dealers sold approximately 250,000 vehicles and the sales of Fords and Chryslers increased.

The Auto Club’s Car Buying Service dealer network reported significantly increased foot traffic due to the rebate program. In addition, Auto Club offices have been busy assisting members with obtaining duplicate vehicle titles to meet the clunker program’s administrative criteria.

Cash for clunkers offers motorists an economic incentive to purchase a more fuel efficient new vehicle by trading in their older and less fuel-efficient vehicle. Congress passed cash for clunkers into law so older vehicles getting 18 miles per gallon or less in combined city and highway driving would be scrapped and exchanged for vehicles that get at least 22 mpg. (The mpg information on new vehicles is on its window sticker.) Window sticker data for pre-2008 vehicles isn’t valid since the methodology for estimating mpg was updated in 2008. To obtain the correct mpg go to http://www.fueleconomy.gov/.

The government credits drivers $3,500 to improve fuel efficiency by four mpg and $4,500 if they improve it by 10 mpg or more by buying a new vehicle. Dealers apply the credit at purchase.

Criteria (like owners must have insured the trade-in for the full year preceding trade-in, etc.) must be met to receive the credit. For more information, go to http://www.cars.gov/, the official site that offers program details and is hosted by the National Highway Traffic Safety Administration (NHTSA). The government has also set up an information hotline at (866) 227-7891.

The Auto Club’s Car Buying Service Manager Dave Cavano recommends that buyers avoid typical car-buying pitfalls and:
  • Research costs, features and safety. Before stepping foot on a dealership lot, use the Internet and car-buying web sites like AAA.com to seek out the vehicle you want, the dealer’s cost, mileage ratings, safety features, warranty coverage from the manufacturer and special features, like hybrid technology or 4-wheel drive. Crash-test ratings are available from NHTSA and the Auto Club. Both provide crash-test ratings and information at no charge. Ask the local Auto Club office for the brochure “Buying a Safer Car--2009.”
  • Set a budget and stick to it. Decide how much you can spend on buying a car and determine if you’re eligible for discounts, or any rebates or incentives from the manufacturer or dealer, in addition to the incentives offered this year through government programs.
  • Get pre-approved financing. Get pre-approved before going to a dealer. "If the dealer can offer better financing, that's great. If not, you know you have a competitive loan," said Cavano.
  • Get referrals from trusted sources. Ask family members, friends, neighbors, or trust-worthy organizations such as the Auto Club, about reliable makes and reputable dealers. The Auto Club has developed a network of reputable car dealerships in their Car Buying Service network which offer discounted vehicle prices to its members.
  • Know. Don’t Guess. Newspaper automotive ads are a good place to check for vehicles. The Auto Club also provides new vehicle pricing information.
  • Test-drive before you buy. Make sure you test-drive the car you want to buy in the manner you plan to use it. Drive up hills, on highways, and in stop ‘n go traffic, to mimic your commute and other driving patterns.