On Saturday 24th July, Julia Gillard announced that should Labor be re-elected, they would enact a ‘Cash for Clunkers’ type scheme meaning that Australians who trade-in their pre-1995 vehicles for brand new fuel-efficient vehicles would be eligible for a $2,000 rebate once that car is scrapped.
This ‘Cash for Clunkers’ idea (officially called the Cleaner Car Rebate), has been pitched as an eco-friendly measure as it entices owners of older cars (gas-guzzlers) to trade up to more fuel efficient models. The $395m committed to the project would also mean a significant economic boost to the automotive industry id it does, indeed, encourage people to trade-up their cars. The cash for clunkers scheme in the US was embraced by the public but also drew fire from certain quarters as critics suggested that it only encouraged potential buyers to bring their purchases forwards rather than consider buying a new car that they haven’t before. The economic benefits of the cash for clunkers scheme are also doubted by some who argue that the environmental cost of the manufacture of the new car outweighs and emissions savings that the new cars will deliver.
One thing is for sure – and that is the cash for clunkers scheme will be enthusiastically embraced by those considering buying a new car, if they have a clunker to trade-in. At Private Fleet, our expertise rests with sourcing new vehicles and negotiating their price. Whilst we do trade-in vehicles, often for older cars, wholesalers may not commit as much cash as we would hope so it’s great news that this cash for clunkers rebate can take that side out of the equation and maximise the effective changeover price for our clients.
Key Points of the Scheme:
There are also likely to be a few more conditions which we think will apply to the cash for clunkers Scheme:
The “Cash for Clunkers” scheme has received a pretty lukewarm reception from both the Australian press and the industry. The detractors cite the following shortfalls.
So lets look at a few scenarios with cash for clunkers and see if it will work for you.
Q. I own a pre 1995 car but it’s worth much more than $2000. Can I benefit?
A. No – the government will allow just $2000 plus possible the scrap value. Sorry your car isn’t a clunker!
Q. Great, I own a car that qualifies, but I’ve set my heart on a new Holden Commodore, OK?
A. No – it probably won’t be on the list of acceptable new car, as it has a six (or eight) cylinder engine.
Q. I have a 1997 car, will it qualify in two years time?
A. Probably not, unless the government changes the rules.
Q. I have a 1998 Toyota Corolla. I can’t get more than $1000 cash for a trade in and want to update to a new Corolla – will I get the money?
A. Probably yes! If you have owned your car long enough and you plan to buy or lease a new Corolla.
Q. My car qualifies for the rebate but I can’t afford a new car. How can I benefit?
A. Unfortunately it doesn’t look like you can, as a trade in for a used car does not comply with the conditions.
The government estimates that around 200,000 people will get a “yes” and their $2000, and the country will save around 1 million tones of carbon by getting these old inefficient cars of the road.
So cash for clunkers does seem to have some merit – or does it? Have your say NOW on our cash for clunkers blog
To find out more about cash for clunkers, and whether you might be eligible, please get in touch on 1300 303 181.