Playing off details of the government plan, the Automotive Stimulus program will offer trade-in allowances of up to 20 percent higher than the published trade-in value of the car, up to $4,500, according to the dealer organization’s Web site. To establish the trade-in value, the dealer program uses values listed at kbb.com for cars traded in in fair condition, and deducts Kelly Blue Book’s stated reconditioning cost. Unlike the government’s cash for clunkers program, the dealer program doesn’t crush any trade-ins. You get the value of the trade published on KBB, plus 10 percent if the car you’re buying gets 2 mpg better than the trade in, or 20 percent if it gets 5 mpg better.
Consumers can use the rebate to purchase any new or used vehicle at the dealership as long as it gets at least 2 mpg more than their trade in, using EPA combined fuel economy estimates. So while it won’t necessarily reduce fuel consumption nationally, it will aid individual consumers’ gas bills. The Automotive Stimulus applies to all vehicle types, including SUVs and large vehicles.
Sales Manager Brian Benstock of Paragon Honda in Queens, NY, said their dealer will not use the program as an excuse to pad the price of new cars to make up for the additional trade in value. It remains to be seen how participating dealers treat shoppers. If the Automotive Stimulus program puts a squeeze on a dealer’s potential profit, he is likely to try to make it up somewhere else in the deal. Caveat emptor.
In fairness, not all customers got good deals under the federal clunkers program. One reader left a comment on our Money blog that a dealer jacked up the price of the 2010 Subaru Outback he wanted to buy by $1,100 when he heard the reader would use the federal clunkers rebate. Our reader bought the Outback elsewhere.
Note that even through this program, deals will still vary. Ultimately, you won’t know whether you got a good deal unless you shop around and compare offers from multiple dealerships.
As always, we recommend you shop around for the best price. The 2009 Automotive Stimulus Program could lead to a good deal, but consumers must be vigilant to ensure any benefits seen on the trade-in are not offset by padding the sale price, finance rate, surcharges, or add-ons.
For more information on buying a new or used car, check out our car-buying advice.
Let us know if you tried the 2009 Automotive Stimulus Program. If so, did it work? Do you think you got a good deal? Use the Comments feature and share your experience