Will the Feds Give You $5,000 to Help Buy a New Car?

March 19th, 2009

Will the government give you $5K to get rid of this?

Finally, an idea that has potential to help consumers buy cars!

We’ve heard endless stories about the government helping the automakers and the automakers offering vouchers to employees… but up until now there’s been very little help for you and me in buying a new car.

And really, nothing’s going to help automakers more than making it easier for us to buy cars.

A “Cash for Clunkers” plan has been introduced by Representative Betty Sutton (D-Ohio) and co-sponsored by Representatives Bruce Braley (D-IA), John Dingell (D-MI), and Candice Miller (R-MI). Officially known by the convenient acronym Consumer Assistance to Recycle and Save (CARS) Act, it would provide vouchers of between $3,000 and $5,000 to consumers who trade in vehicles at least eight years old for ones that get better fuel economy.

A few limitations are attached to the proposed bill, including a stipulation that the new car must be assembled in North America and achieve 27-30 mpg on the highway. Also, the car must cost less than $35,000.

I’ve been known to voice my opposition to federal bailout money for the automakers, but this is an idea I can get behind. It accomplishes three things:

  1. Stimulates the economy by investing in citizens, not companies
  2. Helps convince consumers to buy from companies who build cars in North America (not limited to the Big Three)
  3. Has a positive impact on the environment by getting older cars off the road (traded-in cars must be scrapped under the CARS act, not resold).

According to Consumer Reports, a similar measure in Germany has resulted in a 21% increase in auto sales. That’s something automakers in the U.S. would love to see!

If your car was at least 8 years old and the government gave you $5,000 toward a new car, would you trade in your current car?


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    1. kerri
      July 12th, 2009 at 02:08 | #1

      @K. Ward, if it wasn’t a new car then this wouldn’t help the automakers any. They don’t get royalties for when their cars are resold they only get money for when they sell their new cars. Used car buying makes sense financially to consumers but is actually pretty bad for automakers.

    2. Janet
      July 9th, 2009 at 18:27 | #2

      I deff would! I drive a 93 Chevy blazer. That thing sucks cash out of my pocket fast. Also it puts out a really pretty smoke cloud when you start it (I take part of the blame for global warming) On average my drive to work is 100 miles or more, An I agree with American cars only, our counrty really needs to get back on it’s feet. Free hand outs upset me though, if you really want something you should earn it, Everyone getting something from the system has really gotten old!

    3. K. Ward
      June 28th, 2009 at 21:37 | #3

      Sounds good, but I don’t think it should have to be a brand new car. Pre-owned vehicles should qualify as well to an extent. I’m not saying get a free car, but $1000-$2000 out of pocket wouldn’t be bad. I drive a 1991 Chevy Astro because I can’t afford a new car payment.

    4. tgriffith
      June 22nd, 2009 at 13:21 | #4

      @Dara J. Hawes
      Hi Dara-
      The legislation for this “Cash for Clunkers” plan has changed quite a bit since this blog was written. There’s an update here: http://www.cargurus.com/blog/2009/06/18/why-people-hate-congress/

      To answer your question though, the rebate would be handled through your dealer. Good luck and if you take advantage of the plan, please let us know what your experience is like!

    5. Dara J. Hawes
      June 22nd, 2009 at 10:21 | #5

      How do you go about applying for this rebate?

    6. Michael
      June 3rd, 2009 at 19:29 | #6

      That’s the thing about logic. The people that don’t have it can’t really understand why their tautological claims of faith don’t quite cut it as a well-reasoned argument.

    7. foliposterhus
      April 15th, 2009 at 19:30 | #7

      That’s the thing about faith. If you don’t have it you can’t understand it. And if you do, no explanation is necessary.

    8. mike
      April 11th, 2009 at 11:17 | #8

      people will no doubt find ways around the rules and abuse the system. taxpayers will end up paying much more than intended to people not interested in really taking advantage of the program in the way it was intended.

    9. Dizzy
      April 8th, 2009 at 07:47 | #9

      When my 78GMC Bigblock won’t sell on Craigslist for 1500, i’ll gladly trade it in for 5000.
      I may even go back to the dealer and buy it back for the motor :D

    10. Jeff
      April 2nd, 2009 at 18:38 | #10

      Was all for turning in my 01 Metro until I read the part about better mileage being required. Darn clunker still doesn’t use much gas. Then I though about my other old vehicle until I read the part about the trade ins having to be scrapped. Can’t part with my ’59 Ford truck that way.

    11. Andy Werner
      April 2nd, 2009 at 13:36 | #11

      I have a 1994 Mazda MPV van that gets 15 and 20 MPG if the Gov’t.
      gives me $5,000 Cash yes I will buy a new car.
      plasticsman in Stuart FL

    12. Lorraine
      April 1st, 2009 at 22:14 | #12

      I will gladly utilize the CARS act and trade my 1998 Chevy for a new car if I can get $5,000 for it. It is about time to trade anyway and this would be an incentive to start looking a bit quicker. Plus, due to the fact that I am a widow and on a fixed income, it will make the amount I have to borrow less and the monthly payments lower. Thank you.

    13. March 20th, 2009 at 03:46 | #13

      If I’m not mistaken, our car at home would qualify. However, I don’t want to trade that one in just yet because it has sentimental value and such. The only thing that would probably convince me to trade it via the CARS Act would be that nobody would be able to convert it into an electric or hybrid car, which I’d gladly spend my money on.

    14. Danny
      March 19th, 2009 at 17:47 | #14

      In my case, No.
      – still cannot afford to even have a monthly car payment in my budget
      – auto insurance and annual property tax goes up
      – tend to like the older vehicles better, though there are positives about new vehicles as well

      I am still trying to understand how the $5,000 by the government is going to be financed. What would happen if one lost their jobs and still making payments? Sounds like a good ideal in the right direction, so as long as most things are thought out.

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