On Monday, the cash-for-clunkers program gets under way. US dealerships will be able to offer up to $4,500 in federal money toward new car purchases for consumers ready to trade in their old, fuel-thirsty models.
But if your used car qualifies as a clunker (click here to check), make your deal early. The program may not last long.
Although the bill allows the program to run until Nov. 1, the legislation signed by President Obama in June included $1 billion in funding. With the government fronting each deal at $3,500 to $4,500 a pop, that would fund only about 250,000 trade-ins. Americans have more than enough eligible clunkers to exhaust the program long before then and interest is high.
"I know dealerships that already have more than 10 [interested] customers,” says Jessica Caldwell, an industry analyst with automotive information company Edmunds.com. With about 30,000 dealerships nationwide, an average of 10 cars would exhaust the fund quickly. “I would advise most consumers … to take it in early,” she adds.
“Everyone is saying that demand is unbelievably high,” says Brian Pasch, CEO of an automotive digital-marketing group in Rumson, N.J. In the past month, his website – www.cashforclunkersfacts.com, set up to answer customer questions about the program – has had more than 550,000 unique visitors. He expects the money to run out by Labor Day.
If car manufacturers sweeten the deal with trade-in incentives of their own, which are traditionally announced at the beginning of next month, the federal funds could get used up even faster, he says. Chrysler has already announced a "Double Cash for your Old Car" matching rebate. Of course, Congress could approve more funding if it deems the program a success in getting inefficient, polluting cars and trucks off the road, says Ms. Caldwell.
In the meantime, Mr. Pasch advises consumers to let dealerships spend a few days digesting the 136-page eligibility rules, released Friday. “And then get in there.”