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Weigh in on the Cash for Clunkers bill

That 1987 Volvo 242DL you nursed through college has just appreciated in value to the tune of $4500.00.

President Obama signed into law a bill that is called the ‘Consumer Assistance to Recycle and Save’ Act (CARS). The bill is designed to provide incentives for consumers to trade in their older high-mileage gas guzzling vehicles. The program is being administered by the National Highway Traffic Safety Administration (NHTSA). When you trade in an eligible vehicle at a participating dealership the federal government transfers the money directly to the dealership. Which means you will not incur any income taxes. The lump sum payment can then be used to purchase or lease a new vehicle. The bill was designed to allow consumers to take advantage of better financing terms on their new vehicles.

Before you go down to the nearest junkyard and resurrect that old Ford LTD there are a few things you should know. The trade-in vehicle must have been owned and insured by the same person for the past year. The vehicle also must be manufactured within 25 years before the date of the trade-in.

Unfortunately, I will not be able to trade-in my little brothers 1976 Dodge Dart. I am getting sick of seeing that thing! Maybe I will just have to buy it from him and recycle it myself.

The amount of money that you will receive for your trade-in is ultimately based upon the fuel efficiency of the car you are purchasing. If the new fuel-efficient automobile is a passenger car and the combined fuel economy is at least 4 miles per gallon higher than the combined fuel economy of the trade-in than you will receive $3500.00. If the new passenger vehicle has a combined fuel efficiency that is at least 10 miles per gallon higher than the trade-in you will receive $4500.00. There are different rules for light trucks and SUV’s. For more information go to the offical website at www.cars.gov.

There are some other things to keep in mind. The new passenger car you are purchasing must have a combined 22 miles per gallon fuel efficiency rating or better to qualify. The new car cannot be valued higher than $45,000.00. It does not need to be a hybrid. The government payment can also be used for a lease if the duration of the vehicle lease is 5 years or greater. To be eligible for the incentives you must make the transaction between July 1, 2009 and November 1, 2009.

This bill will help out the ailing automotive industry. It will drive sales and help out the entire supply chain for automotive manufacturers. As an environmental bill it falls flat on its face. Critics of the bill point out that production of new vehicles outweighs the environmental claims made by taking less efficient vehicles off the road. Some of the most outspoken critics include prominent environmental groups.

Personally, I feel that if you are in a financial position to afford a new car, and you honestly need it, than you should take advantage of the program. That is if you live a lifestyle that is dependent on a car. If you can live without a car then you should continue to do so – cars trash our environment, and they are a money suck. That being said I recommend you take a look at Subaru the company has some very progressive environmental practices. Including a commitment to zero landfill waste as part of the clean plant initiative.