Cash for clunkers

Congress has passed and President Obama has signed into law the cash for clunkers program; H.R. 2346.

This bill is designed to spur the sale of new cars in the United States.

The program runs from July 1st, 2009 – November 1st, 2009.  The program will allow up to 1 million vouchers to be issued by the Federal Government.  The car traded in must have been insured by the owner for the prior 12 months.  The car must have been made within the last 25 years. 

The car traded in must get 18 miles to the gallon or less.  If the car purchased gets 28 miles to the gallon or more then you may qualify for a $4500 voucher.  If the car purchased gets 22 miles to the gallon or more you may qualify for a $3500 voucher.  SUV’s and trucks can qualify for the program as well; however, they have different MPG targets.

Basically when you trade in your “clunker” on the purchase of a new car the car dealership will get a payment from the Federal Government and will turn around and give you either $3500 or $4500 as a trade in value.  They will then turn around and have your “Clunker” permanently destroyed.  

Mike Sylvester, CPA/ABV “accredited in business valuation”