07/02/09

As the federal Cash for Clunkers program, first reported by AIM Group June 23, gets ready to roll out it's picking up auto industry detractors as well as supporters.

AutoTrader.com and NADAGuides.com have collaborated to place a tool on both their Web sites that will help consumers with the program. These online tools will tell car shoppers if their current vehicle qualifies for the program and list for them the qualifying new vehicles, with the rebate amount that could be applied to their purchase. What alters the rebate amount from the low of $3500 to the high of $4500 are the type of vehicle chosen to purchase and the difference between their old "clunker's" miles per gallon (mpg) and that of the new car. This is a smart, traffic-inducing tool and one that auto dealers would be wise to emulate for their own sites.

Naysayers of the government program, now renamed CARS (Cash Allowance Rebate System), caution that few American car owners will qualify or will really benefit from the program. The main problem, according to Peter Valdes-Dapena, senior writer for CNNMoney.com, is that the $3500-$4500 the federal government is offering as a refund is in lieu of a trade in - not in addition to one -  and some of these old cars would bring that or more in trade-in value without this program. The other concern shared by several including yours truly is that people who are driving old clunkers worth $4500 or less may well be doing so because they really can't afford to take on car payments.