The government hopes giving people a nice check for their old, falling-apart gas-guzzler will both jump start the auto sector and help the environment. The "cash for clunkers" program has a more formal, official name: Car Allowance Rebate System. It works like this: if you have a car that's no more than 25 years old, and gets under 18 miles per gallon, and you want to buy a brand new car that gets at least 4 miles per gallon more, the government will give you a subsidy toward the purchase
You'll get $3500 bucks if the new car gets between 4 and 10 miles per gallon better than your old one. And $4500 if your new ride is at least 10 miles per gallon more efficient.
Some dealers have been letting people trade in their clunkers since July 1, but the rules only became final this week. Either way, local dealers are appreciating the business.
OVERMAN: We're actually low on inventory right now because of the Cash for Clunkers.
Dan Overman is a sales manager at Ganley Ford in Cleveland, and says the only problem so far is using the government website to register the deal.
OVERMAN: Overall the program is going great, except everything with computers: somethings freeze up, so it's a little hard loading everything in.
Foot traffic is also up at Rick Case Honda. Pam Price is a sales manager there and she says some customers are a little confused about how it all works.
PRICE: Yeah, they seem to have an idea, but when they come in here, we make it perfectly clear for them. We go, we do the comparison on the miles per gallon on the website, and what the old vehicle is getting, the clunker, and what the new vehicle is getting. We have a grid that explains it to the customers.
Dealers can’t resell the clunkers; they’re required to have them destroyed.
Another caveat is that the program will give out a billion dollars in rebates, but once that’s used up, no more cash for clunkers. That gives salespeople like Price an opening for a pitch.
PRICE: It's only going to cover a billion dollars, so that's about 250,000 cars nationwide. So I think everyone is jumping on it now and that's what we're recommending it that people do it before the money runs out.
Thanks to ideastream intern Ida Lieszkovszky for help with this story.