ALERT: Despite running short of initial funding, an additional $2 billion has been added to the Cash for Clunkers Program to keep it running through Labor Day. Track the latest info on our Cash for Clunkers news page.
So, how does saving $4,500 on a new car sound? Pretty good, right? You know what sounds better? Saving $9,000 on a new car.
Unless you've been living under a rock, you probably know that the government's Consumer Assistance to Recycle and Save (CARS) program -- better known as Cash for Clunkers -- kicked off on Monday July 27. Already, over 4,000 vouchers have been used to purchase new cars, and ten percent of the program's funding has been used -- all before the first week of the program is over, leading some in Congress to call for more funds to extend it.
The program offers a voucher of up to $4,500 towards the purchase of a new car when consumers trade in an in older, less fuel efficient car for a newer, cleaner and greener machine (to learn the program details and if you can get $4,500, check out our Cash for Clunkers page). The program has two goals: To get inefficient older cars off the road (thereby cutting emissions and lessoning fuel consumption), and to give the struggling car industry a shot in the arm. And the industry is excited to get it.
[Ready to trade in your old ride? Contact local dealers]
Jumping the Gun
Car companies are already banking on Cash for Clunkers paying off for them. To make sure it does, they're also helping it pay off for consumers. Hyundai started offering consumers the credit early, something that the car company says has driven 10 percent of its new car sales. The company says that 38 percent of consumers are aware of the program and 11 percent have held off on new car purchases so they could take advantage of it.
While Hyundai helped consumers out by offering them the credit early, Chrysler went twice as far. In late July, the company began matching the $4,500 Cash for Clunkers credit on some models. The incentive was so successful, Chrysler had to retract it as their supply of some models started to dwindle after just one week. They'll still match the full $4,500 on some models, but other models now see lower rebate offers.
If consumers don't want the matching credit, they can choose zero-percent financing for six years. Chrysler is even offering the deal to consumers who don't qualify for the $4,500 credit. If you do qualify for the CARS program, however, the deal means $9,000 off many new Chrysler, Dodge and Jeep vehicles. Check out our Best Jeep Deals and Best Chrysler Deals to learn more and find a dealer in your area.
Chrysler isn't the only one matching the government cash. BMW -- yes, BMW -- has announced that it's offering buyers $4,500 off the 335d, a diesel 3 Series that's popular with reviewers. The 335d starts at $43,900. Add in $9,000 in government cash and BMW's "eco-credit" and the price drops to $34,900, which is about what the less-powerful BMW 328 goes for. Plus, the 335d has an EPA-estimated combined fuel economy of 27 miles per gallon; the 328 only nets 22 miles per gallon. BMW is also offering 4.9% financing on the 335d for a limited time.
But Wait, There's More
Besides Chrysler, other car companies are piling on the Cash for Clunkers incentives. Mazda has announced that it will be adding $500 to the $3,500 or $4,500 government rebate on every model. Toyota also announced special Cash for Clunkers leases. Under the CARS rules, the government rebate can be applied to leased cars, but the lease must be at least 60 months long. To fit the program rules, Toyota has announced 60 month lease offers on the Yaris, Corolla, Camry, RAV4 and Tacoma. Some of the lease payments they're offering are pretty low too -- $79 per month for 60 months on a Yaris lease. Check out the Best Toyota Deals to find a dealer as well as discounts available where you live.
Other car makers are allowing consumers to add current incentives to the government rebate. That means, for example, that you could take the CARS rebate on a new Ford Fusion, plus add in $3,500 that Ford is currently offering on the Fusion and save $8,000. That brings the price of a new Ford Fusion from about $20,000 to about $12,000 -- which is what you'd expect to pay for a compact car. Check out the Best Ford Deals to see what's available on other models and to find a dealer.
Cash for Clunkers officially kicked off July 27 and runs through November 1, or until its funding runs out. It's possible the funding will run out well before November, so if you want to take advantage of the program, you should act fast. Stay on top of everything happening with the CARS program with Cash for Clunkers news. Learn more about the program -- including how you can qualify for up to $4,500 to put towards a new car -- on our Cash for Clunkers page. Or, if you're ready to buy, contact dealers in your area.