Buying a New Vehicle? Act Fast If You Want To Get A $3,500 Or $4,500 Credit!
By Irvin Dawid
It was great for new car buyers who owned gas guzzlers, but the $3 billion stimulus program for automobile manufacturers and their employees and suppliers, and car dealers, known as "Cash for Clunkers" has run out of funds.
Unless you've been living in a cave (which might be possible for some Club members), no doubt you've heard of this program, formally known as the Car Allowance Rebate System that became operational on July 24 and will end on August 24. But what is it and does it apply to you? Simply put, you may receive a credit of $3,500 or $4,500 if you trade in a "qualified" vehicle and purchase a new vehicle that meets minimum fuel efficiency ratings.
The bill's name is a misnomer – it's really "cash for guzzlers"; your trade-in vehicle must get 18 mpg or less, be no older than 25 years, and been owned and insured for at least a year.
Unlike other trade-in programs that focus on improving air quality, the purpose of the program, now called Car Allowance Rebate System (CARS) is primarily two-fold:
• To increase the overall fuel efficiency of the US auto fleet by
- Boosting the sales of fuel-efficient vehicles
- Retiring gas guzzlers from circulation
• To act as a stimulus for the ailing auto industry, both domestic and international.
OK – you're ready to trade in your guzzler – what vehicle can you apply your credit toward? All new vehicles (imported and domestic) with a list price under $45,000 are eligible. They must also meet certain minimum fuel economy standards:
| Minimum miles per gallon (mpg) for new vehicle: |
22 mpg Cars 18 mpg SUV's, small pickups, minivans 15 mpg Large vans and trucks |
| To receive $3,500 credit, new vehicle's fuel economy must exceed trade-in's by a minimum of: |
4 mpg Cars 2 mpg SUV's 1 mpg Large vans and trucks |
| To receive $4,500 credit, new vehicle's fuel economy must exceed trade-in's by a minimum of: |
10 mpg Cars 5 mpg SUV's, small pickups, minivans 2 mpg Large vans and trucks |
To assist prospective car buyers, Sierra Club has launched an on-line guide, www.sierraclub.org/clunkers, which includes a recommended list of new vehicles that qualify under the program; these vehicles also have the best environmental performance in terms of smog-causing emissions, etc.
A word of caution: the federal government initially allotted $1 billion to this program that was exhausted after just ten days. Congress approved legislation authorizing another $2 billion on August 7, signed by President Obama that is expected to last to Labor Day (Sept. 7), though the program ends on Nov. 1.
In case you are wondering how Sierra Club views this extension of the program, read the August 6, 2009 press release, "Car Consumers Get"
"Consumers clearly got the message on increasing fuel economy during the first round of Cash for Clunkers, with the Department of Transportation reporting the following statistics:
- The average fuel efficiency of trade-ins was 15.8 mpg
- The average fuel efficiency of new vehicles purchased was 25.4 mpg
- Trade-ins and purchases equaled a 61% increase in fuel efficiency
- 83% of the trade-ins were trucks
- 60% of the new vehicles purchased were cars
"The Cash for Clunkers program is only as good as we consumers allow it to be," said Ann Mesnikoff, Director of Sierra Club's Green Transportation Campaign. "We are excited to continue helping consumers choose a vehicle that gives a boost to both the economy and our environment. Choosing the right new vehicle will save money at the pump, cut dependence on oil, reduce carbon emissions and help the auto industry."
Not in the market for a new vehicle but still want to get rid of an old clunker?
You may qualify for $1,000 cash back if your vehicle is model year 1989 or older.
This Vehicle Buy Back Program is sponsored by the Bay Area Air Quality Management District and is a conventional vehicle retirement program focused on improving air quality by removing the most polluting vehicles.
To see if your 1989 or older vehicle qualifies you for the $1,000 cash, see www.baaqmd.gov/Divisions/Strategic-Incentives/Vehicle-Buy-Back-Program.aspx, or go to www.baaqmd.gov and write 'buy-back' in the search option.
From an environmental perspective, the best motor vehicle is the one that is driven the least. However, if you need a vehicle, it should be efficient from both an air quality and climate perspective. New vehicles are inherently less polluting than older vehicles because of advanced emissions technology. Since the CARS program requires that the new vehicle be more efficient than the trade-in, this program is a win-win for climate as well as for air quality – though we wish the new vehicle efficiency requirements were more substantial for the SUV and truck category.
The Car Allowance Rebate System clearly has its critics, environmentalists included.
Please see this particularly well-informed Washington Post, August 8 piece written by notable Stanford transportation expert, Lee Schipper, and others: When It Comes to Being Green, Cash for Clunkers Is a Lemon.
The Associated Press evaluated the energy savings and also found them to be insubstantial.
Automobile information experts, Edmunds.com, surveyed the vehicles purchased through the program and found a top-ten list dominated by SUVs, crossovers, and pickups.
Irvin Dawid serves on Sierra Club California's Air Quality Committee and the Loma Prieta Chapter's Global Warming & Energy Committee. E-mail: Irvin.Dawid@lomaprieta.sierraclub.org
To Learn More
To determine the efficiency rating of your vehicle, go to www.fueleconomy.gov/feg/CarsSearchIntro.shtml; select your vehicle model, year, etc. to determine if it meets the 18 mpg maximum.
To get all of the details about the Car Allowance Rebate System (CARS), go to www.cars.gov.
To learn about the cleanest vehicles for sale in California, go to the California Air Resources Board website, www.driveclean.ca.gov. Check out the new Environmental Performance Labels!
