Friday, May 11, 2012

How to claim Cash for Clunkers

Probably by now, most of you know what the “Cash for Clunkers” or CARS program is. If not, it’s a way to trade in your old, gas guzzling car for a new one and you’ll get $3,500 or $4,500 from the government, right away, for free.

The official site with all the FAQs can be found here:

Here is the quick read of what rules apply…

* 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.
* It does not matter if your trade-in or new purchase is foreign or domestic, both qualify.
* Consumers should expect that all information collected through the CARS Program will be kept confidential. Social Security numbers are not required for a CARS transaction.

It’s easy to take advantage of. Toyota, Ford, and GM (if you really want to) all have sites dedicated to CARS.

For some people, this handout could be worth it.

Example: You have a 1996 Buick Century and it gets 15 mph/ gallon. You have owned it for over 1 year and have the money to finance or purchase a new car. In this case, go for it! You’d be crazy not too.

On the other hand, if you have a good working car, that gets you over 20 mph/ gallon, think twice. Do you really need the new car? Check out my previous thoughts on purchasing new vehicles and you decide.

Reminder: New cars can qualify for a tax deduction. The sales tax on new car purchases can be deducted on next year’s tax return.

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