'Cash for clunkers' starts Monday
By MSN Money staff
Feds release final rules for the $1 billion gas-guzzler trade-in program, including its recipe for killing engines permanently.
Though automakers and their dealers have been peddling cash-for-clunkers deals since the bill was signed last month, the hard sell really begins Monday.
The program offers owners of many older vehicles up to $4,500 to trade them for brand-new vehicles.
Regulators on Friday issued the final rules for the $1 billion program, unveiling a framework for registering dealers and a way to pay them once a car is proved to be scrapped. Though dealers may not file for payment until today, any sale since July 1 that otherwise meets the requirements (spelled out below) is covered.
Some noteworthy provisions in the rules:
* Only new-car dealers can issue the credit, and they must have an active franchise agreement with the manufacturer. That means used-car dealers can’t issue the vouchers. Neither can a new-car dealer that has lost its franchise, as several thousand Chrysler and General Motors dealers have recently.
* Dealers are required to disclose to the consumer the scrap value of their trade-in and can keep $50 of that amount to cover their administrative costs.
* Though all trades must be in drivable condition, dealers are required to disable the vehicles' engines before scrapping them. Regulators’ accepted procedure: Drain the oil, then run several quarts of sodium silicate through the engine. As engine heat evaporates the solution, deposits of dehydrated sodium silicate line the engine's lubrication system, abrading all the moving parts and causing the engine to seize.
* The dealer must stamp the title "Junk Automobile, Cars.gov" before submitting it for reimbursement. And the dealer must have clear title before doing so.
* Scrap facilities can sell any part of the car except the engine block or whole drivetrain, but ultimately the car must be taken off the road.
* Violators of the rules face civil penalties of up to $15,000 per incident.
Beware 'cash for clunkers' sites
The National Highway Traffic Safety Administration is warning car shoppers that official-looking sites have already sprung up, offering information on the program and asking for personal data or preregistration.
In fact, if the site uses the term "cash for clunkers," it's not official at all. The program's name is the Car Allowance Rebate System.
"There's only one official site for the government, and that's NHTSA's CARS.gov Web site," said NHTSA spokesman Eric Bolton. "Folks should go there and not rely on 'cash for clunkers' sites on the Internet as they are not official."
An estimated 250,000 vouchers will be issued on a first-come, first-served basis. Dealers let you know whether your trade qualifies, credit the amount to your down payment, then apply for the voucher. Only new vehicles -- domestic or imported, purchased or leased -- qualify, and they must have sticker prices under $45,000.
Buyers do not have to register or apply for any part of the program. Dealers do.
Trade-ins must be 1984 models or newer, get no better than 18 miles per gallon, and have been registered and insured for the past year.
'Cash for clunkers': Scammers are out - MSN Money
|Currently Active Users Viewing This Thread: 1 (0 members and 1 guests)|