VIA CHICAGO TRIBUNE:

As government rebate program officially launches Friday, dealers are preparing for a rush to showrooms

Meanwhile, Does Cash for Clunkers make sense for you?

The program known officially as the Car Allowance Rebate System offers rebates of $3,500 to owners who relinquish cars rated at less than 18 miles per gallon to purchase ones getting at least 22 m.p.g. If the new vehicle gets at least 10 m.p.g. more than the trade-in, the rebate is $4,500. For SUVs, minivans and pickups, a 2 m.p.g. improvement is required, while a 5 m.p.g. gain nets the full rebate.

The government rebate is taken off the price after manufacturer discounts and incentives are applied.

Reimbursement will be wired directly to the dealers, who must show proof that the clunkers have been taken off the road permanently by being “crushed or shredded,” according to the legislation.

The program is expected to run four months, or until the $1 billion is depleted. The National Highway Traffic Safety Administration has until July 24 to issue the final regulations, putting most transactions on hold until Friday.

The staggered launch and stringent requirements have led to some confusion among dealers and consumers, but anticipation appears to be building, leading some to project a rush of clunkers to showrooms.

“There’s a lot of interest, and there’s a lot of junk out on the road,” said Roger Rudin, general manager of Willowbrook Kia/Ford.

The dealership has fielded dozens of inquiries, and Rudin expects 20 to 30 pre-qualified buyers to drive off in new cars on Friday, especially the more fuel-efficient Kias.

“It’s going to be kind of like when the zero percent [financing] first came out in October of ’01,” he said. “It was a madhouse.”

Other dealers are somewhat less optimistic.

“We’ve already had a lot of people that have come in that were very disappointed that their cars didn’t qualify,” said Al Frisch, owner of Highland Park Ford Lincoln Mercury. “They might have had a car that pricewise was a clunker, but it has to get less than 18 miles to the gallon.”

With incentives tilted toward some import lines that would yield the full $4,500 rebate, Frisch suggested his own incentive plan.

“It doesn’t need to be this complicated,” he said. “I think the industry would be better served with a flat rebate for anybody that buys a new car, or even better, anybody that buys an American car.”

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