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Questions about clunkers

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The government’s cash for clunkers program is creating its share of confusion among the citizenry.

The program — dubbed CARS, for Car Allowance Rebate System — provides rebates of $3,500 or $4,500 to consumers who trade in a vehicle with combined city/highway 18 miles per gallon or less and buy a more fuel-efficient new car or truck (full details and rules are here).

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CARS took effect over the weekend at more than 20,000 dealerships nationwide, and the questions have been flying ever since.

One of the biggest head-scratchers concerns the revised fuel economy ratings the Environmental Protection Agency quietly issued late last week in response to a requirement in the CARS law that the ratings be more precise. The added precision affected 164 models — 78 vehicles that used to qualify under the program now don’t, and 86 vehicles that didn’t qualify now do.

A frustrated Barbe Roberts of Ventura was all set to trade in her clunker of a 1993 Toyota Camry — and its 18-mpg EPA-rated fuel economy — on a new vehicle. Then the new figures came out and her car is now rated at an ineligible 19 mpg.

“I don’t ask for help from the government, I don’t even ask for help from my mother,” Roberts said. “However, if something is out there that I could use and means the difference between a new car and a used one, I like to take advantage of the program. But changing the rules at the end stinks.”

She’s now back in the market for a used car.

There’s also a question surrounding what happens to cars that were traded in before the revised mileage ratings were issued and that are now ineligible. (CARS “officially” started July 1, and some deals were done before the government issued its detailed rules Friday on how the program would work.)

Auto website Edmunds.com, which posted an alert on the new fuel economy ratings Monday, called on the government to clear up the confusion.

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“Consumers acting in good faith should not be penalized for undisclosed and last-minute changes made by the government,” said Kevin Smith, Edmunds.com editorial director.

Buyers are also complaining that some dealers are charging state sales tax on the full sale price of the new vehicle. As we wrote about in a previous post, California authorities have ruled that state and local sales taxes should be applied after the rebate has been deducted.

(For more information, see the state Board of Equalization news release or call the state Tax Service Center at [800] 400-7115.)

Then there’s the scam issue. The Federal Trade Commission issued a warning to consumers about websites that may ask for personal information — such as name, address and Social Security number — in exchange for details about the clunkers program.

Several reputable sites, such as Edmunds.com and Kelley Blue Book’s kbb.com, are offering information about the program. But the FTC said that websites seeking disclosure of personal information should be reported to the agency at www.ftc.gov or by calling (877) FTC-HELP. (The program’s official website, by the way, is www.cars.gov.)

There have also been reports that the National Highway Traffic Safety Administration, which is actually overseeing the clunkers program, has been swamped with calls from dealerships seeking to register for the program, resulting in frustrating delays for some dealers.

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-- Martin Zimmerman

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