The cash for clunkers program is the informal term given to the Car Allowance Rebate System which has been proposed by the Government. This gives a new incentive to the Americans to trade their gas consuming cars for more fuel efficient new cars. This rebate program offers cash vouchers to those who want this trade off.
The cash for clunkers was passed in June by the Congress to improve the struggling auto sales and also as an attempt to improve the environment. The program officially started on July 1, 2009 and ended on 24th August 2009. The paperwork would be handled by the new car dealers who would be the instruments of the National Highway Traffic Safety Administration to administer this system.
The basic concept of the program is such: In case you own a vehicle model 1984 or newer than that, which has been insured as well as registered for the past year and gets 18 miles to the gallon or less, then you qualify for the program. The condition is the car should be drivable.
This program was originally funded with $1 billion which is the taxpayers' money. The idea was to provide a rebate up to $4500 to the dealers selling new cars and accepting old ones with bad mileage- the condition being that the dealer should completely scarp the old car and destroy all its parts.
The dealer is to provide the buyer with an estimate of the scrap value of the car you are trading in. This estimate would be in addition to the rebate offered and would not be tallied against it.
Statistically this program led to the scrapping of more than about 700,000 vehicles. The Cash for Clunkers program may have had a short term benefit in helping the car dealers in clearing their inventories which were getting crowded; the more ever lasting effect is perhaps the psychological game changer. This program has acted as a fear breaker to the U.S consumers.
As more and more people were suffering the onslaught of the recession, yet they came forward to take benefit of this program and buy a new car. It gave a new hope and lent support to the belief that economy is indeed picking up once more.
Every such program when launched for the very first time would have its good and bad points. As will different people have different opinions on the success or failure of it. In the end, one can say that the concept is a noble one and the idea behind it a very positive step towards getting the less fuel efficient vehicles off the road. Besides this it did go a long way in boosting the auto sales and providing the dealers as well the buyers a compromising line where they can both benefit. Add to it the benefits to the environment with more fuel efficient, less polluting vehicles on the road, the program in all possibility may have achieved what it originally set out to.
Author Resource:
Tony has written in great detail about cash for clunkers program on his cash for clunkers website . Read these to have a thorough understanding of the policy. Distributed by Content Crooner
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