CARS or Cash for Clunkers: A Personal Car-Buying Experience

July 29, 2009

How could I resist? The government is going to buy my poor old van and I can get a new vehicle at a drastic savings. So the process begins. Because I have experience in the car business I thought this would be a snap. I checked on line to be sure my vehicle was eligible (www.cars.gov) and there it was...eligible. So I was off to my favorite dealership to find a new car. Of course I also did my research on the new car by visiting the GM website to see what was available and which would give me the highest allowance. With papers in hand I had decided to go for the Pontiac Vibe or G3 because they also had the highest factory incentive monies.

The manager at the dealership helped us test drive the vehicles, although he didn't have many on the lot. I decided on the Pontiac G3 because it would give me the biggest bang for my buck in the CARS program. We went in to figure out the numbers. He pulled out a 3-inch-thick document with the rules for the CARS program. He had to do a lot of checking on the engine of my Clunker to calculate "combined gas mileage," then we had to beat that mileage by 10 miles per gallon on the new vehicle to qualify for the highest allowance of $4500.

It took quite a while before we were able to justify the numbers and hope for the best. He used the www.cars.gov to get his information as well and had to do a lot of checking on my "clunker" and the engine to be sure we had all the correct information. There is also a lot of additional paperwork to be completed before you can take delivery, so be sure you have the time to do everything that needs completed. Don't be in a hurry when you are in the dealership.

All prospective buyers need to be aware there is a lot of vague advertising on this program and they must know that not all "old clunkers" will qualify. The levels of allowances are based on mileage improvements. The maximum is $4500 is you improve by 10 mpg (rules are slightly different when trading in large SUVs and trucks). In addition there are several ownership requirements (you must have owned the vehicle for a minimum of one year), insurance requirements (the vehicle must have been continuously insured for a minimum of one year), and you must be able to verify this with documentation. Your "clunker" must be drivable, and there is no "trade in" value. You only get what the program allowance calculates for your situation. Only the person who holds the title can take advantage of the offer.

If you currently have a small vehicle with a small four-cylinder engine you most likely will not qualify for the program. If you are driving a large car, van, SUV with a six- or eight-cylinder engine and you go down to a small vehicle with a fuel-efficient engine you are more likely to qualify.

This is a great program for those who can take advantage, but NOT EVERYONE QUALIFIES. Do your homework before you go so you won't be disappointed or be put in a position where you cannot utilize the program for your own benefit.

Note: Your "clunker" will be disposed of by a government agent and crushed to keep it off the road, so no sentimental value is attached; it is after all a "clunker."

Old car creative commons photos courtesy kb35 and mcgraths (twice) via flickr

Jessie L. Thatcher
AskPatty Automotive Expert

Jessie has over 17 years front end retail dealership experience. Currently she provides consulting for auto dealerships and other business helping to identify their customer service and process issues and helping them to improve their use of new technologies.

As a retiree from the Reynolds and Reynolds Company, a leading automotive software provider, Jessie was involved in the development and quality control for new and innovative F&I and Retail Sales software product development for automotive dealerships across the country. As a consultant for Reynolds & Reynolds she visited many customers across the United States to help them improve and realign their front end processes and work to improve their customer service operations.

Jessie was one of the few women to attend and graduate from GMI's Dealer Management Academy and helped to open the doors for other women in her area dealerships.