The Cars Allowance Rebate System
The Cars Allowance rebate System is a federal program that was initiated to get rid of the old gas guzzling vehicles and provide the common man with better fuel efficient vehicles by means of a credit facility.
This was aimed at the auto industry so as to provide a timely boost in their car sales and help them recover from the slump triggered by the recession during the past months.
It not only aims at boosting the staggering auto industry it also seeks to scrap older vehicles and put on road a number of better equipped fuel efficient vehicles.
Though the program was infused with a sanction of about a million dollars, the cash inflow in running below the danger mark and it may soon be the end for this ambitious program set up by the federal govt. if funds are not transferred immediately according to govt. sources the initial one million dollars sanctioned for this scheme was exhausted within a period of one week at the outset when over 250,000 cars were sold. Additional funds were poured into the system when President Barack Obama signed a bill allowing the influx of $2 million more to steady this scheme.
The main aim of this scheme is being fulfilled with the department of travel stating that the number of vehicles that have been sold account for about a 61% increase in the fuel efficiency of the vehicles on road.
Scrappage criteria as laid down by the govt.
As per the rules and regulations laid down by the federal govt. and the NHTSA dealers cannot sell vehicles that have been traded in for newer fuel efficient varieties. This policy has been implemented so as to avoid schemes and scams of sorts that may damage the image of this scheme world over. To help realize this notion, auto dealers are expected to intentionally destroy the car engines so as to prevent resale of the vehicles. This is done by draining the motor oil and replacing it with sodium silicate solution that is heated when the engine is started causing it to solidify into a glass like substance thus blocking the engine and running its capacity, thereby preventing the sale of the cars and powertrain components. Though some auto dealers have criticized this approach maintaining that the engine is one of the most important parts of a vehicle, many others have taken it in their stride and are continuing with the sale and purchase of vehicles within the limits of the rules and regulations laid down.
Results
According to surveys made by the DOT, results show that auto giants like GM motors and Chrysler have made good use of this scheme as they have supplied more than 47% of the new cars and trucks in return for those scrapped by the common man. This scheme has proven to be a boon for GM and Chrysler who were very much hit by the recession and with the implementation of this scheme they can hope of slowing their downfall and begin climbing up the rungs of the industry again.