Cover Story: Cash for clunkers cautions

By Jeff Atkinson - bio | email

CHARLOTTE, NC (WBTV) - If you're thinking about taking advantage of the Cash for Clunkers extension this weekend consumer groups have a warning.  Scammers are ripping people off.  And in some parts of the country some dealerships are of taking advantage of car buyers.  WBTV is On Your side with what to watch out for.

More money was pumped into the cash for clunkers program.

The two billion dollar extension was passed Thursday night by Congress.

That means you have until Labor Day to trade in your old car for a more fuel-efficient model .. And get paid for doing it.

It seems with every new opportunity to save some money.. comes an opportunity to lose money to scammers.

And now that Cash for Clunkers is back for a second round.. you want to be wary of what's sprouted up and do some math before making that trade-in.

When you're driving something like this.. hard to say no to a deal.. when the government's willing to pay you more than what your car's worth.

Just ask these folks.

"I was going to wait and shop some other places. Glad I didn't."

"I wanted to buy a car. Prices are good. Clunker deal is good and I'm going to take advantage of it."

"We thought about waiting until next year. Decided to take a look now."

But consumer groups say be careful.

Tom Crosby with Triple A Carolinas says, "Cash for Clunkers sounds good but you need to investigate it to make sure that it works for you."

And here are some cautions.

Some dealers have reportedly been requiring buyers sign an agreement saying if the government doesn't pay the dealer the rebate.. buyers will be on the hook.

Don't do it.

"It's the dealer.. the government that are providing the rebate.. you don't need to get between it," says Crosby.

Another caution.

Some buyers wanting to participate in the Cash for Clunkers program are trading in for the rebate.. 45-hundred bucks.. when in fact their car's worth far more.

Know your trade-in value before you go in.

"For the consumer a lot of people are getting out of cars that are just going to cost them down the line," says Christopher Wathey, sales manager at Town And Country Toyota on South Boulevard in Charlotte.

But keep in mind the hidden costs.

That shiny new ride you may want to slide into.. means you'll likely have a car payment (that clunker's probably paid off) your insurance will go up.. and it'll cost you more in property taxes.

Finally, beware of scams on the internet misrepresenting "Cash for Clunkers."

The official name of the government program is "CARS."

But because there's been some confusion over how it works... imposters are taking advantage

by offering buyers a voucher or the opportunity to have their name added to an application list.. sometimes requiring a fee or deposit.

Some websites falsely promising they'll put you in touch with authorized dealers in their area.

Don't fall for it says the Triple A's Tom Crosby.

"We do find a lot of confusion.. a lot of misinformation about it."

Cash for Clunkers can also be used if you want to lease a new car.

The rebate can be combined with other sales incentives automakers offer.. and government tax rebates.. like those associated with buying a hybrid.

The program by the time it's over with.. could take 3-quarters of a million gas guzzlers off the road.

It's already credited with making July the best month for car sales in nearly a year.