It Had to Happen: Car Dealers Create Shadow Cash for Clunkers Program

Robert Farago
by Robert Farago

Car dealers know a good environmental policy gimmick when they see one. Some 60 dealers (so far) have banded together to launch a new official-looking program that offers consumers between $500 and $4,500 of “incentives” for their used or . . . wait for it . . . new car. Welcome to world! Automotive News [sub] tries (and fails) to adopt a suitably cynical tone for the story. “The dealer program is less restrictive than the government’s. For example, it allows shorter leases than the 60-month minimum required by the clunkers plan, and there’s no limit on the price of the new vehicle; the government program sets a $45,000 cap. A qualifying trade-in must be a 2006 model or older and must have been owned by and registered to the same person for six months. The dealer program requires a buyer to purchase a replacement vehicle with 2 mpg better fuel economy.” Or, you know, maybe not (nudge nudge, wink wink). You want fine print? They got fine print!

The rebate is a maximum of $4,500, based on a credit above the average trade-in value set by three guides: Kelley Blue Book, Black Book and the NADA Official Used Car Guide. Any replacement vehicle that gets 2 mpg or better is eligible for a 10 percent trade-in bonus; a replacement vehicle that gets 5 mpg or better is eligible for a 20 percent incentive above the trade-in value.

Program details will vary depending on state regulations, says Sean Wolfington, co-founder of Level 5 Advertising [creators of the pump-top TV network Fuel Zone Network] in Dulles, Va., which created the campaign and Web site.

Robert Farago
Robert Farago

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  • Commando1 Commando1 on Aug 07, 2009

    Oh, come on now. One of the longest running scams used by dealers is the: "Drive it! Tow it! Push it! $3000 GAURANTEED trade-in on your car, running or not". Now it's "Would we lie to you? The government says it's OK."

  • AJ AJ on Aug 07, 2009

    I love cars, but I sure do hate buying them with scum bags like this and their fine print. Yes I know, their out to provide great service to the under served. Think that if you want.

  • Shane Rimmer Shane Rimmer on Aug 07, 2009

    There is an extra space in the url for the autostimulusplan site.

  • Jeff Puthuff Jeff Puthuff on Aug 07, 2009

    Shane, it might be on purpose. RF may not want to officially link to them; I'll check with him.