August 21st, 2009 by admin
Nation’s largest motor club provides tips for consumers to consider and answers frequent questions about Consumer Assistance to Recycle and Save (CARS) program
(Orlando, Fla. – 8/21/2009) The U.S. federal government’s Consumer Assistance to Recycle and Save (CARS) program, commonly referred to as “Cash for Clunkers,” sparked a surge in new car sales in the U.S., but will come to an end on Monday, August 24 at 8 p.m. EDT. While the program can offer motorists a great incentive to purchase a new vehicle, AAA urges motorists wishing to take advantage of the program before it draws to a close to fully educate themselves about the program, their options and their potential new vehicle.
“As with any vehicle purchase, consumers should do their research and educate themselves on all the options before making a decision,” said John Nielsen, AAA director of Approved Auto Repair and Auto Buying Programs. “For most Americans, their vehicle is the second largest investment they make. It’s not something to be rushed into or taken lightly. But for those that take time to learn about all their options, including their eligibility for the CARS program, they can find the right vehicle to benefit them now and for years to come.”
Things to Know Before Participating in CARS Program
1. Check the value of the trade-in vehicle in advance. If the value is greater than the $3500 or $4500 credit offered through the CARS program, consumers should sell their existing vehicle separately. Consumers can visit AAA.com/auto for assistance in determining the value of their existing vehicle.
2. Negotiate the best deal. Regardless of the incentives offered under this, or any other program, consumers should always negotiate the best possible deal on the three most important aspects of most vehicle purchase transactions —
- Credit value for the trade-in
- Price of the new vehicle
- Terms of any credit needed to purchase the vehicle
In addition to the credit via the CARS program, consumers also may qualify for other dealer incentives, manufacturer rebates or federal incentives (such as those for hybrid vehicles). Not all deals will be the same, so consumers should continue to shop around.
3. Evaluate the total cost of vehicle ownership. Consumers should determine if a new vehicle is affordable and what type of new vehicle to purchase based on the total cost of vehicle ownership—not just the purchase price. Other costs that should be considered include finance charges, insurance rates, fuel economy, taxes and registration fees, depreciation value and maintenance costs.
Consumers can reference AAA’s Your Driving Costs brochure for assistance in determining the true cost to own and operate a new vehicle and even evaluate if the costs fits into their budget. The latest edition of Your Driving Costs is available on the AAA Exchange at AAA.com/publicaffairs.
4. Consider used vehicles. While used vehicles do not qualify for the CARS program, depending on a consumer’s financial situation, it may be a better alternative. While new vehicles can initially have lower repair costs due to manufacturer warranties, they also have far greater depreciation value initially. Consumers should weigh all their options before making a decision.
5. Select the right vehicle for you. Only select new vehicle models are eligible for the CARS program. While a wide variety of vehicle types are included, consumers should not feel pressured into purchasing a vehicle that does not fit their needs and lifestyle. As with any vehicle purchase, consumers should evaluate their lifestyle, needs and priorities to select the vehicle that is right for them. No matter what their needs, AAA recommends consumers consider fuel-efficiency a high priority.
Some of the factors to consider include: How large is your family now and might it be in the near future? How long is your commute? Will you need to tow a boat or use it for other recreational purposes? Do you travel with pets? Do you want a more environmentally-friendly vehicle?
6. Do not sign contingency agreements. Consumers should not sign contingency agreements to pay back the dealer should their CARS credit be rejected. It is the dealer’s responsibility to make sure the purchase qualifies for the program.
7. Take possession of new vehicle at time of transaction. If the dealer has the new vehicle in stock, consumers must be allowed to take possession of the vehicle at the time of the paperwork is complete. Consumers do not have to wait to take possession of their new vehicle until the dealers receive their CARS credit from the federal government.
8. Don’t pay an extra fee. Consumers should not be charged a fee by dealers specifically to process paperwork for the CARS program. While other dealers fees will still apply, there should be no additional fees for this program.
Frequently Asked Questions about the CARS Program
What is the CARS or “Cash for Clunkers’ program?
The CARS program provides auto buyers with a $3500 or $4500 credit if they trade in an inefficient used car or truck, built in 1984 or later, for a more fuel-efficient, new vehicle. The credit is in addition to any incentive that a dealership also may provide the buyer.
Does my existing vehicle qualify?
To qualify, the trade-in must be a drivable car or truck with a fuel-economy rating of 18 miles per gallon or less that has been insured and owned by the seller for one year or more. Consumers can check the eligibility of their trade-in at http://www.fueleconomy.gov/feg/CarsSearchIntro.shtml.
What vehicles are eligible to purchase?
Eligibility of the new vehicle is determined by the increase in the miles per gallon (mpg) of the new car or truck compared to the trade-in. New cars and minivans must get a combined 22 mpg or more to be eligible. Light duty trucks (such as pickup trucks) and sport utility vehicles weighing less than 6000 pounds must get a combined 18 mpg or more. Consumers can check eligibility of trade-ins compared to new vehicles at http://www.fueleconomy.gov/feg/CarsSearchIntro.shtml.
How is the amount of the amount of the credit determined?
The amount of the credit will be determined by the difference in fuel mileage between the trade-in vehicle and the new vehicle purchased. If the new vehicle has a combined fuel economy of at least four mpg, but less than 10 mpg, higher than the trade-in vehicle, the credit is $3500. If the new vehicle’s combined fuel economy is at least 10 mph higher, the credit is $4,500.
How long will CARS last?
Applications from dealers for rebates will stop being accepted on Monday, August 24, at 8 p.m. EDT.
What documentation do I need to participate in the CARS program?
The following documentation will be needed in order to participate in the CARS program and should be taken with you to the dealership:
- State identification or driver’s license
- Title of the trade-in vehicle
- Proof of continuous insurance for the past 12 months on the trade-in vehicle (may be consecutive insurance cards or a letter on insurance company letterhead)
- Proof of continuous registration for the past 12 months
Also, do not forget to take the actual trade-in vehicle with you to the dealership.
As North America’s largest motoring and leisure travel organization, AAA provides more than 51 million members with travel, insurance, financial and automotive-related services. Since its founding in 1902, the not-for-profit, fully tax-paying AAA has been a leader and advocate for the safety and security of all travelers. AAA clubs can be visited on the Internet at AAA.com.