CARS - Cash For Clunkers

2009-07-27T11:42:00.000-07:00

In a nutshell, CARS (Car Allowance Rebate System) provides a rebate incentive for trading in your old car for a new one. There are similar rules for small trucks as you will see below. The intent of Congress was to increase new car sales and also increase the overall fuel efficiency of the nation's passenger vehicle fleet. Other nations have also implemented similar rebate programs.

Many of the auto manufacturers are already promoting the CARS rebate by offering to double the discount or rebate. If you don't qualify for the CARS rebate, some dealers are still offering their own rebates.

Here is a summary of the rules just released this past Friday:

The car you are trading in must be owned by you; you must have owned it and kept it registered and insured for at least a year before trading it in.
The traded in car must be less than 25 year old.
You must purchase a new car (not used) to qualify for the rebate.
The traded in car must have a combined EPA rating of 18 mpg or less.
The new car must have a combined EPA rating of at least 22 mpg. The rating must be at least 4 mpg higher than the car being traded in. If the difference in mpg is between 4 and 10, then your rebate would be $3,500. If the difference in mpg is 10 or higher, then your rebate would be $4,500.
The CARS program will continue until the $1 billion of funds runs out or November 1, 2009, whichever comes first.
You can only get one rebate per person.
You can lease the new car, rather than buy it, but the lease term must be at least 5 years.
The mpg requirements for trucks are different and more complex. Go to www.cars.gov for more detailed information.
The rebate will not be considered taxable income for Federal personal income tax purposes, according to the CARS website.

If you think that you qualify, there is one more consideration that you must take into account. What is the trade-in value of your car? If it is worth more than the CARS rebate, then you will probably not want to take advantage of the CARS program. Under the CARS rebate program, you will not get a trade-in allowance. You may get additional dealer or manufacturer rebates and you may get a very small salvage value, but your car must be destroyed. Therefore, the dealer cannot give you a trade-in allowance on top of the CARS rebate. Under CARS, there are some items that can be salvaged after you turn in the car, but then the car must be shredded or crushed!

For more information go to www.cars.gov

To look up your old car's combined fuel economy, go to www.fueleconomy.gov/cars

Welcome!

2009-07-15T19:29:00.000-07:00

Welcome to my first attempt at blogging. The purpose of this blog is to provide useful information to clients and friends in an efficient and inexpensive manner.

Don't expect frequent posts. I will not waste your time or mine with trivial posts (oh maybe once in a while if I find something humorous or useful but off topic). Expect to find useful information that may help you save at tax time, and other items of financial interest.

There are several ways to find out about new posts to this blog. First, if it is really important, I will e-mail you if I have your e-mail address on file. Second, if you follow me on twitter, I will send out a tweet letting you know what's new on the blog: www.twitter.com/schinkcpa

I have a very useful and informative brochure available (clients and friends only, please), that summarizes the "American Recovery and Reinvestment Tax Act of 2009". The brochure is written by the American Institute of Certified Public Accountants and is in pdf format. I think you will find it useful and it is free. Simply e-mail me and I will reply with the file attached.

Have a great summer!

schinkcpa@gmail.com

Schink CPA: Taxes and Stuff

CARS - Cash For Clunkers

Welcome!