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'Cash for Clunkers' rolled out

| Wednesday, July 15, 2009

PHILADELPHIA — "Cash for Clunkers" won't solely save the environment, rescue the beleaguered auto industry or spare consumers from financial distress, but the $1 billion federal program promises a little help in all three areas.

The program will offer incentives of $3,500 or $4,500 to those who buy or lease a more energy-efficient new vehicle. The goal is to get people to trade in a qualifying gas-guzzler — car, SUV or light truck — for a comparable vehicle that gets substantially more miles per gallon.

The program's narrow focus has drawn criticism. Still, lawmakers are hopeful that it will make a small dent in energy use and pollution, as well as jump-start depressed auto sales. Without it, automakers are on pace to sell just 10 million new vehicles in the United States this year — down dramatically from 16 million in 2007 and 13 million in 2008, according to Edmunds.com .

One limitation is the window of opportunity. Although the rebates theoretically became available Wednesday, they are unlikely to spur sales until final procedures are announced, probably around July 24.

At the other end, the program expires Nov. 1 — or whenever the money runs out.

Of course, Congress might relent and extend the program. And meanwhile, the funding cap may help by pushing fence-sitters to act.

"We're having customers come in and ask about it every day or say that they're waiting for it every day," said Ross Choate, managing partner for the John Kennedy Ford, Mazda, and Subaru dealerships in Philadelphia's suburbs.

Here are answers to some key questions about the program, formally called the Car Allowance Rebate System:

Which cars qualify• To be eligible for the incentive, a buyer must bring in an operable car that is less than 25 years old and that gets a combined EPA city-highway average of 18 mpg or less. The buyer must have owned and insured the car for the last year.

Economically speaking, the car must be suitable for scrapping — if it is valued at more than $4,500, it may be worth more as an ordinary trade-in.

To get any incentive, you must buy a new vehicle that averages at least 22 mpg and at least 4 mpg more than the "clunker." To get the larger $4,500 incentive, the new car must beat the old one by 10 mpg.

One other requirement: The new vehicle's manufacturer's suggested retail price cannot exceed $45,000.

Some new cars obviously qualify — think Toyota Prius, Mini Cooper or Pontiac Vibe. So do most smaller cars.

But, depending on your current vehicle, so may some midsize or larger sedans, and plenty of non-hybrids, such as Toyota Camrys, Hyundai Sonatas and four-cylinder versions of the Ford Fusion and Mercury Milan. To check models' mileage, go to www.fueleconomy.gov .

Can I junk an SUV or minivan• Yes, and you may be able to use the incentive for a new one, too, which is one of the law's provisions that angers some critics. New SUVs and other vehicles classified as "light-duty trucks" under the law are eligible if they get at least 18 mpg.

For the $3,500 incentive, the new light truck must get at least 2 mpg more than the old one. For $4,500, it must get at least 5 mpg more.

Certain larger trucks weighing up to five tons may qualify.

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