Cash For Clunkers: Will You Qualify?

Clunking noise

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Speaker: In Germany, it worked like a charm. A program to give consumers cash for their old clunkers took gas-guzzling cars off the road and boosted new car sales by 40 percent. But here in the U.S., a similar cash-for-clunkers program is more complicated. Dealers, like Jim Russamano assumed spelling in New Jersey, say it may not be as effective as Germany's in driving up sales.

>> Jim Russamano: The restrictions are much more severe than I thought they would be.

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Speaker: Germany spent five billion to buy back cars. A clunker was defined as any car more than nine years old. Turn one in for scrap, and you'd receive the equivalent of $3300.00 towards a new car. The U.S. allocated one billion dollars for its program, the car allowance rebate system or CARS. Buyers who qualify received $3500.00 to $4500.00 towards a new car. But the qualification for clunker isn't easy. It's based on an EPA gas mileage rating of 18 miles per gallon or less when the vehicle was new. So this 1989 Buick Regal, a 20-year old car, does not qualify as a clunker because it was sold with an EPA rating of 21 miles per gallon. But this 2000 Ford Windstar, only nine years old, does qualify because its original gas mileage rating was only 17 miles per gallon.

>> Jim Russamano: I think more than 50 percent of the people will not qualify.

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Speaker: And there are more rules. The vehicle has to be less than 25-years old, in drivable condition, and registered and insured by the same owner for a full year before trade-in.

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Speaker: We estimate about 150,000 people will take advantage of this deal. It seems like a good idea, except that when you really go to try and qualify for it, you don't.

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Speaker: For car owners who qualify, there is one more wrinkle. While the program took effect July 1st, the rules won't be ready until July 23rd. Randall Pinkston, CBS News, New York.

==== Transcribed by Automatic Sync Technologies ====