Posted on: June 4, 2020 Posted by: admin Comments: 0
Government Car Allowance Rebate System - Is It Worth It?

It’s no surprise that with the failing economy and the fall of car manufacturers that the government would eventually step in and try to save its depleting areas, but the new C.A.R.S. program is a bit questionable.

First of all, we’ve all seen the ads on T.V. and the headlines in the news talking about President Obama’s new plan to help put more environment-friendly and more gas efficient vehicles on the road. The ads also claim that you can get up to a $4,000 credit for your “clunker” to go towards the purchase of a newer, non-gas guzzling car.

Well if you head over to the official government site for the program, CARS.gov, you should take a minute and read the “Important Things to Know” section.

For those of you too lazy to click a link, here’s what this section states:

Important Things to Know


  • Your vehicle must be less than 25 years old on the trade-in date.
  • Only purchase or lease of new vehicles qualify.
  • Generally, trade-in vehicles must get 18 or less MPG (some huge pick-up trucks and cargo vans have different requirements)
  • Trade-in vehicles must be registered and insured continuously for the full year preceding the trade-in.
  • You don’t need a voucher, and dealers will apply for credit at purchase.
  • The program runs through Nov 1, 2009, or when the funds are exhausted, whichever comes first.
  • The vehicle that you are trading in is required to be destroyed. Therefore, the value you negotiate with the dealer for your trade-in is not likely to exceed its scrap value. The law requires the dealer to disclose to you an estimate of the scrap value of your trade-in vehicle.

Check this site frequently for the most recent updates from the government.

Now let’s break this down.

First, your car has to be no older than 25 years. No problem. Not many people have vehicles dating from 1984, and beyond that, they’re going to want to part with anyway.

Second, the credit you are given only applies if you are purchasing or leasing a NEW car. Ouch. This is not a great part of this plan simply because, at most, you’re getting $4,000 for your old car. That’s going to be your down payment on a car that is more than likely going to cost you $15,000 or more. And again, this is assuming you get the maximum credit possible. So for trading in your old car gets you a down payment on new debt. How to swell!

Moving on.

Third, for the most part, you traded in the vehicle has to get 18 miles to the gallon or less. Another bump in this system. If your older car is from 1999 or later, it probably gets 20 mpg or more (there are a few exceptions to this). So there goes 10 years worth of vehicles. Now that we’ve cleared that up we can pretty much assume that your car has to be at least 15 years old if you’re expecting to qualify for the credit.

The fourth point is pretty straight forward and easy to comprehend. You don’t need a piece of paper to bring with you once you get your credit. It’s automatically applied at the dealership that you make your new car purchase.

The fifth point is also apparent. This rebate program will only last through Nov 1, 2009, or until the money the government has allotted to is has been drained. Simple as that.

Finally, we have point number six. Now if you haven’t got an idea of why this program sounds like a flop yet, this will probably persuade you a bit more. It states first that your trade-in will be destroyed. Who cares. You’re getting rid of it for a reason, right? What you want to read at this point is the line following.

“Therefore, the value you negotiate with the dealer for your trade in is not likely to exceed its scrap value.”

That’s a real bargain breaker there. They aren’t deciding your cars credit worth based upon the condition of the car or if it can drive or even if it’s a good car. All they are going to give you is what your car is worth in metal. Nothing more. So all of those cars you bought brand new with all the bells and whistles don’t amount to much more than how much iron or steel they melt down into. Lovely, isn’t it? And more than likely your car isn’t going to cut to be worth $4,000. So don’t hold your breath.

What this all comes down to is putting in debt to get manufacturers like G.M. and Ford out of debt. Only the government is trying to encourage you to make this decision by giving you what they call an incentive.

I guess if you’re looking to buy a brand new car and don’t have time or are unable to sell your older car, this might work out for you. I don’t see this being a deal by any means. Not to mention this whole ordeal is to try to make Americans drive “greener” cars but is only requiring you to purchase one that gets 22 mpg at least. That’s only four mpg more than the cars they are accepting. So it isn’t making that much of a difference.

This is an all-out flop, in my opinion. What do you guys think?

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