The federal government’s Cash for Clunkers program begins Friday, but some customers and dealers aren’t clear on how the program works.
The program offers up to $4,500 to new car buyers for their old vehicles. The total amount of money received depends on the vehicle being purchased and the one being traded in. The trade-ins will then be destroyed.
But buyers don’t have to take the clunker cash. The money replaces a car’s regular trade-in value, and Marty Book of Carriage Ford in Clarksville says if a trade-in is worth more than the government offers, the customer can opt out of the Cash for Clunkers program.
“It is solely a turn in your vehicle, you get that money toward your purchase and your vehicle is destroyed,” he says. “If they get the trade-in for their vehicle we’re not going to destroy the vehicle. We’re going to trade for it. We’re going to try to sell it.”
Book says it’s still unclear whether the clunker cash is deducted from the new vehicle’s price before or after tax, but it could depend on state law. Kentucky will allow trade-ins to count before tax starting in September.