WLBT 3 - Jackson, MS: Program offers cash for clunkers

Program offers cash for clunkers

(NBC) - The federal government's incentive program to get older cars off the road and stimulate new car sales is set to start Thursday, but not everyone thinks the car allowance rebate system (CARS) is headed down the right road for consumers.

The so-called "cash for clunkers" incentive program is revving-up.

"Its original intent was to get that old car or truck off the street," says Steve Hinchcliff, a car dealer in Nebraska, by providing consumers some extra cash to buy or lease a new vehicle.

Here's how it works. Your trade-in can't be older than twenty-five years old and get less than 18 miles a gallon to qualify. You'll get a $3500 voucher if the new car you buy gets 4 to 9 miles per gallon more than what you trade in; $4500 if the difference is 10 miles per gallon or better.

"People are really excited about it, because it seems like found money to the consumer," says Chip Snyder, a GM delaer in Florida.

But it could be an even bigger bonus for the struggling auto industry.

"In the environment we're in right now, a program like this is heaven-sent," said Benny Dominguez of AutoNation.

Chrysler says it will match the government incentive, taking an additional $4500 off most of its 2009 Chrysler, Dodge or Jeep models. Across the board, many dealers believe the program could mean as many as 20 additional sales a month.

"In almost every case this was somebody who was not in the market," Hinchcliff says. "It's somebody that the program is bringing to the market, so because of that this program is selling cars."

Still not everyone is sold on the plan. Critics say it's too costly and has taken a huge detour from its original intent.

"What began as a reasonable idea to get clunkers off the road, and try to move some more efficient vehicles in their stead, has been hijacked by the auto industry and their friends in congress," says Dan Becker of the Safe Climate Campaign.

The federal program will run through November 1 or until $1 million in rebate credits are reported, whichever comes first.

For more information on the CARS program, visit www.cars.gov.