New incentive could mean great car deals

July 23, 2009 4:10:47 PM PDT
Car sales have been disappointing to say the least for the first six months of the year, but a new incentive from one car maker may change that. No doubt, you've heard about the federal government's program to give you $4,500 for buying a new fuel-efficient vehicle. Now Chrysler is matching that offer. It could take $9,000 off the price of a new car.

As with every offer, there are details that you need to hear. The bottom line is you can save big because of this incentive, but a lot depends on what you drive right now and what you want to buy.

Alan Helfman of River Oaks Dodge says interest spiked right after Chrysler announced it would match the federal government's $4,500 cash for clunkers program. It means consumers could get $9,000 off of a Chrysler product.

"It is a profound impact," said Helfman. "It is something I have not seen in a long time, but we have not ever thrown that kind of dollars at a program."

The government program is designed to get drivers out of gas guzzlers and into more fuel efficient vehicles. If you drive a car made between 1984 to 2001 and you buy a new, more fuel-efficient vehicle, you can get the $4,500 dollar voucher. Chrsyler is doubling that incentive, and it's cutting the cost of some cars nearly in half.

"If you had a car that was from 1984 to 2001, the federal government gives you $4,500 and then Chrysler matches and gives $4,500, so you essentially get this car for $10,000 or less and that's unbelievable," said Helfman.

Drivers trading in cars must have had their current vehicle insured in their name for at least one full year. The incentives are based on improving fuel efficiency.

For instance, the federal program gives driver $3,500 if they trade in a car that gets less than 18 miles per gallon and buy a car that gets at least 22 miles per gallon. If a driver trades in a car for a new one that gets 10 miles more per gallon, the incentive is $4,500.

Sixteen Chrysler models qualify for the program and the company's decision to match the government offer is drawing a lot of attention.

"I think it is a great idea," said Berry Arnold, who's buying a car. "Any time you can save money, save gas, help the environment, all that, it is all good."

It's important to know consumers will not be handed a check or voucher. The dealership discounts the cost of the car and the dealership gets the money from the government and dealerships have to be registered to participate. Also, the trade-in has no value in the eyes of the dealership since the cars are going to be destroyed. So if your car is worth several thousand dollars, this may not be for you.

Chrysler is matching the government plan until August 31.

The government is setting aside $1 billion for the program. Once that is gone, it's over.

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