The U.S. Department of Transportation is supposed to release the rules for the so-called "cash for clunkers" program Friday (July 24th). Iowa Congressman Bruce Braley, a Democrat from Waterloo, co-sponsored the house version of the bill which provides a payment for people who trade in older cars for new ones with better gas mileage.
Braley says the program is set up so car dealers will fill out all the paperwork, and will be required to scrap the clunker car. Braley says all consumers will have to do is provide a qualified car for the program, and dealers will register with the National Highway Traffic Safety Administration to participate. He says you can go to the website: www.cars.gov , to find out which dealers are participating.
Braley talked about some of the other provisions he believes will be in the rules. He says it’s anticipated that dealers won’t be able to charge a fee to consumers who participate in the program.
Braley says there’s another bonus for people, as dealers will be required to provide the scrap value they get for the car, and will only be able to keep a maximum of $50 of that scrap value — giving the rest to the consumer along with the rebate amount.
The rebate for the clunker can go as high as 45-hundred dollars. One billion dollars has been set aside for the program and it will continue until November 1st or until all the money has been handed out. Braley says they believe there are hundreds of thousands of cars that could qualify, but it’s not know how many people will actually participate.
Braley says the key is what consumers are interested in, how it is promoted by the dealerships. He says they know from previous incentive programs by car dealers that are not linked to this program, that "you can generate significant interest by showing consumers that there is a substantial cost savings to them in acting within a certain time period."
Braley says the main goal is to restart the sale of new cars which have stalled as the economy worsened. Braley says he’s like to eventually look at other options for people who may not want the higher registration and insurance costs that go along with new cars. He says they had to stick with new cars to get the program going.
Braley says there is a great demand for people who want to replace aging clunkers with a used vehicle, and he says they looked at a lot of ideas, but had to settle on this compromise to get the bill to the president’s desk. Braley says he’d like to look at how the things are going after the program is implemented and then consider changes.
The program requires you to trade your old car for a new one that gets better gas mileage, or you can lease a new car for a minimum of five years and still qualify.