Cash for clunkers rules complicated

By the end of this week, the U.S. government plans on unveiling the rules for its cash for clunkers program.

The Car Allowance Rebate System, or CARS, will allow folks with a gas guzzler to get a rebate of $4,500 or less when they turn in their clunker and purchase or lease a new car.

The program is supposed to reinvigorate lagging U.S. auto sales with the help of $1 billion of federal money.

But there is major concern among financial analysts whether the program will have its intended effect.

The restrictions set forth on who can take advantage of the program seems to be the major problem.

The preliminary rules that have been released so far say the vehicle must be less than 25 years old and get 18 miles per gallon or less.

Although the list of vehicles that could be eligible is immense, how many people who own such clunkers have the cash to purchase or the ability to take out new debt on a brand new car?

Probably not many, said Jeremy Anwyl, chief executive officer of, an online resource for automotive information.

“In terms of vehicle sales, the only consumers who will be interested are those willing to take no more than $4,500 for their current car and yet be financially able to buy a new one — quite a narrow profile,” Anwyl said.

“This legislation attempts to offer a benefit for the environment and to spur vehicle sales, but the reality is that it does neither very well,” he said.

Some financial analysts concur with that assessment.

Rebecca Lindland an analyst for IHS Global Insight, told the Wall Street Journal the program might boost sales by 175,000 vehicles this year.

But that’s not a whole lot of help, considering the effect the recession has had on the industry.

U.S. auto sales are already down almost 30 percent in the first six months of 2009, with 9.7 million vehicles sold compared to 13.7 million vehicles sold during the same period in 2008.

The specific rules for the CARS program are supposed to be announced Friday. But some preliminary rules are already in place, including:

• The owner of the clunker must have owned the vehicle for at least one year.

• The vehicle you are buying or leasing must be a new vehicle and cannot cost more than $45,000.

• For passenger vehicles being purchased or leased, the combined fuel economy, for both city and highway driving, must be at least 22 mpg (trucks have different standards).

• Once a clunker is traded in, it will be smashed into who knows what (Star Wars reference, everyone; the car will actually be crushed).

• The availability of the rebate will run through the end of October, or until the rebate funding is gone.

• You can lease a car under the program as long as it’s at least a five-year lease.

• Auto dealers that want to participate in the program must register with the federal government.

One of the problems Anwyl has with the program is the one-year ownership requirement.

“If the goal is to remove old cars from the road, why should it matter who owns them and for how long,” he said.

By removing that clause, Anwyl reasons, it could prompt three car sales for every participant: the sale of the clunker to the participant; The replacement of the clunker by its previous owner (likely a used car); and the purchase of the new car by the participant.

That would not only help auto dealers, but would triple the sales tax generated from the sales, Anwyl said.

It makes sense to me. If I wanted to purchase a $22,000 Toyota Prius and didn’t have a clunker, it certainly would be advantageous to me to go out and buy a $1,000 clunker in order to get a $4,500 rebate.

I would argue that some late-model used vehicles also should be included among the vehicles that can be purchased. That would be similar to a program instituted in Germany that saw about a million participants.

The Germans also had a simpler system that didn’t pigeonhole buyers. Plus they invested $6.5 billion in their rebate program.

The U.S. government program is more complicated and far less inclusive. And even if all the rebate money is doled out, it will hardly put a dent in the decline in U.S. auto sales.

If you have a question, tip or tirade, call the Road Warrior at 702-387-2904, or e-mail him at Please include your phone number.

Man killed during road-rage incident
Las Vegas police are looking for two men involved in the shooting death of a man outside a 7-Eleven story at Bonanza Road and Maryland Parkway on Nov. 12, 2018. (Las Vegas Metropolitan Police Department)
VA Southern Nevada Healthcare System hosts Veterans Day Car Show and BBQ
The 4th Annual Veterans Day Car Show and BBQ is held in celebration of Veterans Day at the VA Southern Nevada Healthcare System Medical Center in North Las Vegas, Saturday, Nov. 10, 2018. (Caroline Brehman/Las Vegas Review-Journal)
Wildfires in Southern California
Wildfires hit Ventura County, Calif., on Nov. 9, 2018. (Richard Brian/Las Vegas Review-Journal)
Dedication of Nevada's Battle Born memorial
The state of Nevada on Friday dedicated its Battle Born memorial honoring 895 state residents who have died in America’s wars.
Las Vegas police and Sunrise Children's Hospital hope to prevent infant deaths
The Metropolitan Police Department and Sunrise Children's Hospital held a press conference to get the message out on preventable infant deaths attributed to "co-sleeping" and other unsafe sleeping habits. (K.M. Cannon/Las Vegas Review-Journal)
No serious injuries after car hits tree in south Las Vegas
One person reported minor injuries but wasn’t hospitalized after a Wednesday morning crash in the south valley.
Nellis Air Force Base keeps airmen fed
Nellis Air Force Bass airmen have delicious and healthy food items, and a variety of dining facilities to choose from. (K.M. Cannon/Las Vegas Review-Journal)
Suspicious package found at central Las Vegas post office
Las Vegas police determined that a suspicious package found Monday morning at a central valley post office was not a threat.
Suspicious package found at central Las Vegas post office
Police evacuated the area around the Garside Station post office early Monday morning near Oakey and Decatur boulevards.
With husband's passing, family in limbo for workers' comp claim
Meredith Tracy's husand, Russell Tracy, died more than a year ago on his first day working for a new company when he fell 22 feet into a manhole that was not properly safeguarded. His employer was fined $82,000 in penalties for unsafe practices, but the company has denied her workers' compensation claim, leaving her with no compensation since the death. Rachel Aston Las Vegas Review-Journal @rookie__rae
With husband's passing, family in limbo for workers' comp claim
Meredith Tracy's husand, Russell Tracy, died more than a year ago on his first day working for a new company when he fell 22 feet into a manhole that was not properly safeguarded. His employer was fined $82,000 in penalties for unsafe practices, but the company has denied her workers' compensation claim, leaving her with no compensation since the death. Rachel Aston Las Vegas Review-Journal @rookie__rae
Las Vegas family shares flu warning
Carlo and Brenda Occhipinti lost their son, Carlo Jr., or “Junior,” to the flu last year.
Author Randall Cannon shares an anecdote about Stadust Raceway
Author Randall Cannon shares an anecdote about Dan Blocker, who played Hoss Cartwright on the TV show "Bonanza," and the actor's passion for auto racing at Stardust International Raceway in Las Vegas during the 1960s. (Ron Kantowski/Las Vegas Review-Journal.)
Project Neon 85 percent complete
On Wednesday morning Oct. 31, Interstate 15 northbound lane restrictions were removed opening up Exit 41 to Charleston Blvd. On Thursday Nov. 1, Interstate 15 southbound lane restrictions were removed. The new southbound off-ramp to Sahara Ave. and Highland Dr. also opened Thursday, November 1. With Project Neon 85% finished the flow of traffic on Interstate 15 has substantially diminished. (Michael Quine/Las Vegas Review-Journal)
Girl killed after jumping from bridge onto 215 Beltway in Henderson
Eastbound lanes of the 215 Beltway are shut down by the Nevada Highway Patrol after a female juvenile jumped from the 215 overpass at Stephanie and was struck by a FedEx tractor trailer. Michael Quine/Las Vegas Review-Journal @Vegas88s
Kristallnacht story
An interview with 94-year-old Holocaust survivor Alexander Kuechel who survived seven concentration camps and didn’t leave Germany until after World War II was over. (Mia Sims/Las Vegas Review-Journal)
1 dead in central Las Vegas crash
An early Wednesday morning crash left at least one person dead and another injured. The crash was reported just around 3 a.m. at the intersection of Flamingo Road and Swenson Street. At least two vehicles were involved in the crash, one of which caught fire. Debris was scattered across the intersection as police combed the area as they investigated the scene. Flamingo is blocked in both directions between Swenson and Cambridge Street. Northbound Swenson is blocked at the intersection.
Richard Knoeppel named the 2018 Nevada Teacher of the Year
Richard Knoeppel, an architecture design instructor at the Advanced technologies Academy, named the 2018 Nevada Teacher of the Year on Monday, Oct. 29, 2018. (Bizuayehu Tesfaye/Las Vegas Review-Journal) @bizutesfaye
Mojave Poppy Bees
(Zach Portman/University of Minnesota Department of Entomology) Male Mojave poppy bees exhibit territorial fighting behavior. The Center for Biological Diversity wants the bee, found only in Clark County, to be added to the endangered species list.
Clark County Schools announce random searches
Clark County School District middle and high school students will be subject to random searches for weapons under a new initiative to combat the wave of guns found on campus. (Amelia Pak-Harvey/Las Vegas Review-Journal)
Ron Jeremy and Heidi Fleiss React to Dennis Hof's Death
Ron Jeremy and Heidi Fleiss speak about their friend and prominent brothel owner Dennis Hof's death at Dennis Hof's Love Ranch. (Benjamin Hager/Las Vegas Review-Journal)
Nevada brothel owner Dennis Hof has died
Nevada brothel owner and Republican candidate for Nevada State Assembly District 36, Dennis Hof has died. He was 72. Nye County Sherriff's office confirmed. Hof owned Love Ranch brothel, located in Crystal, Nevada.
Las Vegas police investigate suspicious package at shopping center
Las Vegas police evacuated a southeast valley shopping center at Flamingo and Sandhill roads early Tuesday morning while they investigated reports of a suspicious package. (Max Michor/Las Vegas Review-Journal)
The Las Vegas Metro hosts the K-9 Trials
The Las Vegas Metro K-9 Trials returns to the Orleans Arena to benefit the Friends For Las Vegas Police K-9 group.
Kingman residents love their little town
Residents of Kingman, Ariz. talk about how they ended up living in the Route 66 town, and what they love about their quiet community. (K.M. Cannon/Las Vegas Review-Journal)
Service at Southern Nevada Veterans Memorial Cemetery
Twelve unclaimed veterans are honored at Southern Nevada Veterans Memorial Cemetery in Boulder City in Oct. 9, 2018. (Briana Erickson/Las Vegas Review-Journal)
Las Vegas house prices reach highest level in 11 years
Las Vegas house prices are rising But so is the amount of available homes on the market Still, properties priced below $300,000 are selling fast And September was the first time since June 2007 that the median house price reached the $300,000 mark Las Vegas home prices have been rising at one of the fastest rates in the country over the past year Recent data show the market is now less affordable than the national average
National Night Out
About 100 Summerlin residents gathered at Park Centre Dr. in Summerlin on Tuesday for National Night Out. Lt. Joshua Bitsko with Las Vegas Metro, played with 3-year-old David who was dressed as a police officer. Face painting, fire truck tours and more kept kids busy as parents roamed behind them. (Mia Sims/Las Vegas Review-Journal)
Rural homeless issue comes to a head in Pahrump
On Sept. 12, Pahrump sheriff deputies told residents of a homeless encampment on private property that they had 15 minutes to vacate and grab their belongings. That decision might face some legal consequences. (Rachel Aston/Las Vegas Review-Journal)
Remembrance blood drive on October 1
A blood drive was held at the Las Vegas Convention Center on the one year anniversary of the Oct. 1 shooting. (Mat Luschek/Las Vegas Review-Journal)
News Headlines
Add Event
Home Front Page Footer Listing
You May Like

You May Like