Car Dealers Trying to Continue "Cash for Clunkers" with Their Own Twist
It's called the "Auto Stimulus Plan" and it was launched at the same time as "cash for clunkers" as a way to help car shoppers who didn't have a qualifying trade-in.
Now that "cash for clunkers" has ended, the organizers are hoping car shoppers see it as a replacement to the terminated program.
Here's how it works: The Auto Stimulus Plan offers incentives up to $4,500 for a qualifying trade-in until November 1, 2009. The only requirement is that the vehicle being traded in be:
- 2006 model year or older
- In working condition
- Owned and registered for at least 6 months
It all sounds good at first, but when you delve deeper into the details, it's clear that the program is nowhere near as good as "cash for clunkers".
The "Auto Stimulus Plan" incentive is based on a percentage of the average trade-in value set by the NADA Official Used Car Guide. If you buy a new car that gets 2 mpg better than your trade-in, the incentive is 10% of the trade-in value as set by the NADA Guide. If you buy a car that gets at least 5 mpg better, than the incentive is 20% of the trade-in value.
So let's say you have a 1999 Jeep Grand Cherokee that you're trading in as part of the program. NADA Guides might have it valued at $3,000. Under the "Auto Stimulus Plan", the maximum incentive you would get is $600 (20% of $3,000). If you were to sell this car in a private transaction, you would likely get more than $3,600 for it. Furthermore, some dealers are willing to pay more than what NADA Guides lists anyway, so it's possible you could get a better deal on the trade-in just by shopping it around to other dealers.
The only way to qualify for the full $4,500 incentive is to trade-in a car worth nearly $23,000. There just aren't many models that dealers are willing to buy at that price.
In our opinion, the "Auto Stimulus Plan" seems like a clever way for dealers to market themselves. Car shoppers are unlikely to save a significant amount through this program.
Each week, I'll keep you up-to-date on the latest car deals and news that might affect your purchase. This includes...
- Best Rebates, Incentives, and Lease Deals
- Latest Car Buying Scams and Tricks
- The Best & Worst Time to Buy a Car
- Which Cars You Should Avoid
About The Author
Gregg Fidan is the founder of RealCarTips. After being ripped off on his first car purchase, he devoted several years to figuring out the best ways to avoid scams and negotiate the best car deals. He has written hundreds of articles on the subject of car buying and taught thousands of car shoppers how to get the best deals.Latest Weekly Car Buying Tips
March 2024
- Real Prices of Midsize SUVs Mar 28, 2024
- Which Cars Better to Lease or Buy Mar 28, 2024
- Nissan Rogue Special Deals Alert Mar 28, 2024
- Cheapest Luxury Lease Deals Mar 28, 2024
- New Cars with the Most Available Inventory Mar 21, 2024
- Best Car Deals by Category Mar 21, 2024
- Top 100 Cheapest New Cars for 2024 Mar 21, 2024
- Real Prices of Compact Cars Mar 21, 2024
- Top 100 Cheapest Lease Deals Mar 14, 2024
- Best Car Deals Around the Country Mar 14, 2024
- Cars With the Largest Rebates Mar 14, 2024
- Real Prices of Pickup Trucks Mar 14, 2024
- Best 0% Finance Deals March 2024 Mar 07, 2024
- Best Bang for Your Buck Lease Deals Mar 07, 2024
- Best Electric, Hybrid Lease Deals Mar 07, 2024
- Biggest Discounts on New Cars Mar 07, 2024
- Real Prices of New Compact SUVs Mar 07, 2024
February 2024
- Worst Cars to Lease Right Now Feb 29, 2024
- Price Comparison of Subcompact SUVs Feb 29, 2024
- Real Prices of Large SUVs Feb 22, 2024
- New Cars You Should Wait to Buy Feb 22, 2024
- Real Prices of Midsize Cars Feb 15, 2024
- Largest Hidden Dealer Rebates Feb 01, 2024