Al's Morning Meeting

The Car Allowance Rebate System (CARS), also commonly referred to as the "Cash for Clunkers" program, is scheduled to start today.

The $1 billion federal program is supposed to encourage people to trade in their old and inefficient vehicles for vehicles that burn less gas and are more environmentally-friendly. When you trade in your old vehicle and lease or purchase a new one, you receive a $3,500 or $4,500 discount from the car dealer.

The program is also supposed to help auto sales and energize the economy. But the truth is, $1 billion is about enough to cover an estimated 250,000 new cars and not enough to significantly help the U.S. car industry or the environment.

The government has repeatedly delayed the program, further complicating matters for car dealers. 

The Wall Street Journal pointed out that the program isn't likely to boost fuel efficiency:

"Who makes the nation's most-highly rated smaller cars? Not Detroit. It's Hyundai, Kia and Toyota. It's unlikely you’ll see thousands of Chevy Aveos jumping off the lots in the next few weeks.

"In the end, the CARS legislation watered down the mileage requirements to give GM, Chrysler and Ford a shot at selling larger cars, SUVs and pick-ups.

"For cars, the buyers get a 'rebate' when a new car gets as little as an additional four miles per gallon than the clunker. For a new truck or SUV, it's as little as an additional mile per gallon. Yes, one mile per gallon.

"This is our great green nation in action? Even the Sierra Club, one of the 'cash for clunker' advocates, was horrified. 'Believe it or not, an owner of a 14 mpg gas guzzling truck could trade that vehicle in and get $3,500 taxpayer dollars towards the purchase of a 15 mpg gas guzzler. That kind of purchase will not help reduce our dependence on oil or slash global warming.'"

The federal government's Web site, Cars.gov, explained:

• 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 very large 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, dealers will apply a credit at purchase.
• Program runs through Nov 1, 2009 or when the funds are exhausted, whichever comes first.
• The program requires the scrapping of your eligible trade-in vehicle, and that the dealer disclose to you an estimate of the scrap value of your trade-in. The scrap value, however minimal, will be in addition to the rebate, and not in place of the rebate.

CashForClunkersFacts.com provided a list of frequently asked questions about the bill. Here are some of them:

Q: Can individuals, corporations or partnerships participate in CARS program?

A: Yes, according to the Final Rules [PDF]

Q: Are there updated conditions on the bill?

A: Yes. Here are a few updates:

1. The purchased vehicles, which must be new (2008, 2009, 2010 models).
2. The vehicle can not cost more than $45,000.
3. The vehicle must be purchased between July 1, 2009 and November 1, 2009 to qualify.
4. You trade in a clunker for a motorcycle.
5. Your clunker has to be in driveable condition.
6. You must have a clear title to present to the dealer; no liens.
7. The EPA mpg ratings on fueleconomy.gov is what is being used; no exceptions

   A: No. Your car only has to be qualified for the program. You can check if it qualifies on FuelEconomy.gov. The CARS program does not require consumers to submit their information on the Cars.Gov Web site.