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End of the Road for Cash for Clunkers Program

The Car Allowance Rebate System, affectionately known as “Cash For Clunkers” ended August 24, 2009, after a remarkably successful month. Upon its conclusion, it appears that more than 500,000 gas guzzling cars were taken off the roads and replaced with new and efficient vehicles, stimulating local economies and giving a boost to the troubled auto industry.

Intended to last for more than a single month, the federal government had to extend the program once by infusing $2 billion in funds after consumer demand nearly shut the program down a week after it started. The government was prepared to pay $3 billion in rebates total to fund the program. Consumers who participated in the program received rebates of $3,500 or $4,500 instantly when purchasing a brand-new (and fuel-efficient) vehicle. Auto retailers in turn rendered the “clunker” engines inoperable and sent the vehicles to local scrap yards.

But just because you weren’t able to participate in the program, it doesn’t mean incentives and programs aren’t available to help you get in a new vehicle. Be sure to consider all of your options when shopping for a new or used car. The current economy is especially consumer-friendly, which means that you are in the position to ask for more (and possibly get more) when you are prepared to make a purchase.

New or used car buying tips for consumers

If you are considering entering the automobile market, don’t be upset that you missed out on Cash for Clunkers. While that government-sponsored program was an amazing deal, it doesn’t mean the deals are all gone. Be sure to think about these incentives and factors when shopping for a new or used vehicle:

  • Model year starts in the fall: The automobile industry has suffered one of the worst stretches in decades. Both domestic manufacturers as well as European or Japanese automakers are suffering from record low sales. This means that not only do they have excess inventory, but they also will have to contend with the new 2010 model year inventory coming in. Most manufacturers will get their new-year models on the sales floor by the fall. This means you are in a position to negotiate for a good deal on a 2009 (or even 2008) vehicle.
  • Don’t be afraid of pre-owned: If a brand new car is out of the question, you might want to consider a certified pre-owned (CPO) vehicle at a dealership. These cars are certified by the dealership to be free of defects. They are clean, well-inspected and have very friendly extended warranties. Often these vehicles are turned-in leases, or were loaner cars owned by dealerships. You could find a car that is one or two years old and save thousands off of the “sticker” price.
  • Don’t trade in: If you aren’t pleased with the trade-in value of your current vehicle that your dealership is offering, you do have options. Buy the new car, and sell your old car on the private market. You are likely to be able to get more money from a private purchaser than a dealer. Just be careful that you receive the funds correctly and you are prepared to transfer the title. If you have questions about the process, contact your local department of motor vehicles.