Car Stories that Sell

Automotive dealers got the final rules and regulations for the “cash for clunkers” program Friday, and already over the weekend hastily-produced local TV ads were exhorting buyers to take advantage of the deal.

In a nutshell, the federally sponsored “Car Allowance Rebate System,” as it’s formally known, offers credits of up to $4,500 to people who trade in older cars and trucks for more fuel-efficient new models. The credit applies to purchases, and even to auto leases of at least five years. Trade-ins can be foreign or domestic as long they’re less than 25 years old, be drivable, and average 18 miles to the gallon or less.

To ward off “flippers,” the new law also requires that trade-ins be registered to the new-car buyer for the past year. The program will be in effect until Nov. 1 or until the federal funding is exhausted. Complete details about the program are available at the CARS program Web site.

In a year where auto sales so far are hovering around a three-decade low and major domestic manufacturers are closing thousands of dealers, any jump start to car buying is noteworthy.

You might approach this from a dealer perspective and marry it with an update (and infographic) about the status of car retailers in your area. The National Automobile Dealers Association, a trade and lobbying group, also offers commentary, statistics and updates at its site. An interactive map purports to outline the economic impact of auto sales in each state; it’s worth a look.

Or, you could run a consumer affairs or personal finance story instead. There are a couple of caveats in the fine print of the CARS rules worth pointing out:

• Since the new law – predicated on fuel-mileage concerns -- requires the traded-in gas guzzlers to be crushed and scrapped rather than resold, consumers likely won’t get the standard trade-in allowance for their old cars. They’ll want to weigh the lost value against whatever level of CARS credit they’re eligible for.

• The credited amount might not be exempt from sales tax; depends on the laws in your state so worth a call to the treasury department.

• Many older cars – including the 1997 purple Ford Escort sitting in my driveway – won’t make the cut for the credit because they still get make pretty decent miles per gallon. Consumers can look up their car’s eligibility by using this calculator. It’s rather ironic that those of us responsibly driving fuel-sippers all along won’t be able to cash in on the credit, isn’t it?

• The credit must be applied against a new vehicle costing less than $45,000 – so luxury auto dealers probably aren’t going to yield the best CARS color for your story.

Come back to Your Daily Tipsheet each morning for advice on where to find sources, background and creative ways to make financial news and trends relevant to your audience.