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Cash For Clunkers: Scams

Scott Benjamin

A 1997 Oldsmobile 88 is considered a "clunker" in the terms of the Cash for Clunkers program. This one was recently traded in on a new car, a 2009 Chevy Malibu, which gets higher gas mileage. (AP Photo/Montgomery Advertiser, David Bundy)

By now it's probably safe to say that you've heard about the Car Allowance Rebate System, or CARS program. No? Well then maybe you're familiar with its slang name: Cash for Clunkers. Yeah, I thought you'd recognize that one. It's funny, but up until just a few days ago, I didn't know the program's official name either. However, even with just that little bit of information in-hand, you may be able to save yourself from getting scammed in the process. Intrigued?

I guess we should back up for a moment so I can give you a little background on the program itself. No, I'm not going to go into an in-depth description of specifically which vehicles qualify and the ones that don't -- watch for a High Speed Stuff podcast that we'll release next Tuesday (July 28) that focuses in on those details -- but what you can do is read fellow HowStuffWorks.com blogger Josh Clark's post about the Cash for Clunkers program. And if that wasn't enough info for you (no offense intended, Josh), you can go to the National Highway Traffic Safety Administration (NHTSA) Web site, www.cars.gov, which is the official site for the program.

So what are the scams? Well, as the program is fairly new (it began on July 1), there are really only a couple of pitfalls to watch out for at this time. The first is "official looking" program Web sites that ask for pre-registration information. These sites ask for a variety of personal info, including names, addresses, phone numbers and (gasp!) social security numbers with the promise that you're going to be somehow added to "the list." I'll say it one time and hopefully make it really clear: You do not need to pre-register to take advantage of the cash for clunkers program. Anyone online asking you for personal information (especially your social security number) in order to pre-register you in the program is not affiliated with the CARS program. They're clearly up to no good.

Speaking of up to no good, remember when I said that simply knowing the official program name could prevent you from being scammed? Well, that's because the NHTSA's official site doesn't use the slang term, Cash for Clunkers, anywhere on the site. They use only the official program name, Car Allowance Rebate System (CARS). If you encounter a site that looks official, but uses the term "Cash for Clunkers," well, just be wary.

Another thing to watch out for is any car dealer who offers to provide your clunker rebate via check, money order or direct deposit. The only way that you can take advantage of the Cash for Clunkers program is by having the rebate amount deducted from the purchase price of your new car. Don't be fooled into thinking that a check will be sent to you after you leave the car lot. It just doesn't work that way.

So, what's the best advice I can give you so that you can avoid being ripped-off? It's simple. Just remember to get all of your information from the NHTSA's official Car Allowance Rebate System Web site, www.cars.gov.

More related stuff: Scams How To Protect Against Identity Theft How Electronic Payment Works How Social Security Numbers Work


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