What a crazy week for the CARS program otherwise known as cash for clunkers but officially named Car Allowance Rebate System. I had this as a draft topic and with the brief suspension of the program thought I missed my opportunity. Well, thanks to the government’s quick action yesterday (when’s the last time you saw that!) it’s back in effect for at least another few days.
Even though my goal is to pay off debt, the cash for clunkers program recently passed by Congress intrigued me. While I wouldn’t call it a clunker, Mr. Boomer drives an 11 year old van that has seen better days. The CARS program has several requirements for eligibility. We met the following:
- Owned it at least 1 year (we are the original owners)
- Licensed and insured for at least past year
- Less than 25 years old and running
The only question for me was whether the gas mileage was low enough to qualify as the official government number must be 18 MPG combined city/highway driving. I went to the official website, www.fueleconomy.gov and found my car’s year, make, and model and found out that we got 1 mile per gallon too many. Yes, my number was 18. Although I didn’t personally qualify I think there are some good and not so good things about CARS.
Pros of CARS. The purpose of the program (or at least what I think is the purpose) seems to be met. If $1 billion worth of rebate was spent in four days that’s a lot of new cars sold or leased. With such a high demand it looks like the addtional $2 billion will probably be spent as well. That money will first to the dealers and eventually trickle down through the economy to stores, restaurants, etc.
This program also incentivized people who must have had a need for a newer car but weren’t willing to take the step yet open up their wallets now when our economy needs cash circulating.
Cons of CARS. One of the byproducts of the program is what nearly happened to me and Mr. Boomer. It could have derailed us from our plan of not taking on new debt. How? Well if someone offers you $3500 or $4500 towards a new car purchase and you know you will be buying one in the next few years BUT the deal is now or never, then sometimes you grab that brass ring while you can.
We have billions of dollars of new cars sold in this time frame, but what happens next to the car industry. Is this a short term fix and next month the car lots will be bereft of buyers once again? I don’t know but hope there continues to be a steady demand although I know it won’t be as high as with the rebate.
Did the CARS offer tempt you?