BBB Warns of Cash For Clunkers Scams
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Updated: 12:22 PM Aug 5, 2009
BBB Warns of Cash For Clunkers Scams
The Better Business Bureau is warning drivers that with every new program, comes a new scam and Cash For Clunkers is no different.
Posted: 11:46 AM Aug 5, 2009
Reporter: KKTV
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The Better Business Bureau is warning drivers that with every new program, comes a new scam and Cash For Clunkers is no different.

The Cash For Clunkers program allows drivers to trade their old gas guzzlers at participating dealerships for credit towards a new fuel-efficient car. The BBB reminds the public that they need to do their homework before trying to cash in on a new car.

"The current scam is a take off on the usual attempts to obtain consumers’ personal information in order to steal their identity. The twist: con artists ask for social security numbers claiming they will give the consumer a voucher or have their name added to an application list. The catch: voucher’s don’t exist.

The program’s full name is the Car Allowance Rebate System (CARS). According to CARS.gov, it is the registered dealer who may apply for the program. The auto dealer gets reimbursed, not the consumer. If the consumer’s car meets certain requirements, a credit of $3,500 or $4,500 is deducted from the purchase price of the new vehicle by the dealership. The credit amount depends on the type of vehicle purchased and the difference in fuel economy between the old and new vehicle," says the BBB.

The BBB has the following tips about the CARS program:

• Don’t do business with anyone offering a money order, check or direct deposit. Consumers can only benefit from the program by getting the reimbursement amount reduced from the purchase price of a new vehicle.

• Find out the current value of the car. If it exceeds $4,500, selling it or using it for a normal trade-in may be more cost-effective.

• Know the scrap value. When the dealership takes possession of the car, it may be able to sell specific parts, however the majority of the vehicle must be destroyed. As a result, consumers can negotiate the new vehicle price with the clunker but it will only be worth the scrap value to dealerships, which are required to give consumers a scrap value estimate.

• The program only works for purchasing or leasing new vehicles from a dealership. The program does not apply to used vehicles.

• Protect your personal information and understand contracts before signing. When purchasing a vehicle, get buying tips and a free BBB Reliability Report on the business at www.bbb.org (link below).

Consumers can learn more by visiting the Transportation Department’s Web site at www.cars.gov (link below) or by calling their toll-free number, 866-227-7891. You can also report schemes at that site.

Internet or e-mail based scams can be reported by visiting www.ic3.gov (link below).


Latest Comments

Posted by: jim Location: oakpark on Aug 6, 2009 at 12:50 AM

Generally, trade-in vehicles must get 18 or less MPG (some very large pick-up trucks and cargo vans have different requirements) Jimhenry Blogger www.cashforclunkersfacts.info http://www.cashforclunkersfacts.info
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