AUGUSTA, Maine — Like many Americans during these tight economic times, Melinda Diehl had planned to squeeze as much life as possible out of her 12-year-old SUV. She certainly wasn’t in the market for a new car.
But just as the bills for necessary repairs reached a critical point, Diehl heard about the new government program — nicknamed “Cash for Clunkers” — offering hefty rebates to people willing to swap their older gas guzzlers for a new, more efficient ride.
Suddenly, the Chevy Blazer that was barely worth a few hundred bucks on a normal trade was worth several thousand dollars toward a new car.
So on Friday, the University of Maine graduate student drove her limping Blazer to Belfast and returned home to Brewer with a new, much more fuel-efficient — not to mention reliable — Pontiac Vibe.
“I would never have considered buying a brand-new vehicle, but the rebate pretty much eats the depreciation that happens as soon as you drive it off of the lot,” Diehl said.
The federal Car Allowance Rebate System, or CARS, was supposed to launch officially on Friday but was delayed until Monday after dealers experienced difficulties registering for the program.
But some dealers are already trading clunkers for new vehicles, or at least walking customers through the process of figuring out whether they qualify.
The program rules are quite lengthy, but here is a general overview:
· Customers who trade in older, less fuel-efficient cars or trucks can receive either a $3,500 or $4,500 discount on the purchase or lease of a new vehicle. The amount of discount depends on the type of car being traded and the fuel rating of the new car.
· Because trade-in vehicles cannot be resold but must go straight to the junkyard for scrapping or recycling, customers may receive only the scrap value — not the full trade-in value — of their old car.
· To qualify, an older vehicle must be less than 25 years old, in drivable condition and have a combined fuel efficiency rating of 18 miles per gallon or less.
· The older car must have been registered and insured by the owner for at least one year before being traded.
“The idea is to stimulate the economy as well as help protect the environment from cars that have poor fuel efficiency or a lot of emissions,” said Ellen Martin, a spokeswoman with the U.S. Department of Transportation.
Dealers are being flooded with interest in the program, fueled in part by an advertising blitz by some manufacturers touting the new program.
Jack Quirk with the Quirk chain of dealerships said some of his shops have been taking trades for weeks now. Cars purchased on or after July 1 are eligible for the discount.
“We’ve got more traffic coming through the stores,” Quirk said.
Greg Dutch with Dutch Chevrolet Buick Pontiac in Belfast said his dealership has had a strong response so far from people interested in the program.
“Absolutely, it’s been great,” he said. His shop began taking in clunkers — including Diehl’s — on Friday after the official program rules were posted, despite the glitches in the dealer registration.
Of course, not everyone will find the program suits their needs or budget.
John “Cuppy” Cummings of Ellsworth looked into trading in his 1995 Ford F150, which has 275,000 miles on it. But Cummings said he would have ended up owing $32,000 for a comparable truck even after receiving the “clunker” rebate.
Cummings estimated it would take only $800 to repair his current Ford. And while he could have bought a smaller sedan for a good price with the rebate, Cummings said he uses his truck in his business renting jet skis and campers.
“That’s not the type of car I can utilize anyway,” he said. “It would be just sitting there.”
Likewise, Bruce Hills and his wife are not sure whether the program would fit their specific desires. The Solon couple had thought about trading in one of their two Ford Explorers for a newer version but found they would have had to drop down in size to the Ford Escape.
Hills said they like the Explorer’s room and larger engine for hauling their camper, but they haven’t quite ruled out the Escape.
“We haven’t found one we liked yet,” he said.
Some people said they decided not to pursue the program after realizing their older vehicle would be worth only as much as its value as scrap. The rules released Friday require dealers to disable the engine permanently to prevent it from being resold.
Dutch pointed out that consumers still can get a deal. He gave the example of someone bringing in a car with a trade-in value of $2,000. If the new car has a fuel efficiency rating 10 mpg higher than the old car’s, the consumer would be eligible for the $4,500 rebate, putting them $2,500 ahead, he said.
That’s exactly the scenario that has Errol Nickerson and his wife considering the program. The couple is looking for another SUV that is still easily accessible for Errol Nickerson, who is disabled, but gets better gas mileage than their 17 mpg Chevy Tahoe.
“We have been kicking it around,” Nickerson said, “and this was the incentive that may put us over the edge.”
Diehl acknowledged earlier this week that she was still a bit nervous about buying a new car. But on Friday, she voiced no regrets about trading in the 15 mpg Blazer for the 26 mpg Vibe.
“It was lovely,” she said of her drive home. “It was a very nice change.”
For more information, visit www.cars.gov.