Government 'Cash For Clunkers' Program Begins
(WGN-AM)- After two decades and 126,000 miles, John and Susan Musinski's 1990 Ford Econoline has made its final run.

Belching black smoke and rusting from the wheels up, the once-rockin' van -- replete with curtains, a TV and even a CB radio -- made the 25-mile trek from Lake Villa to Gregory Hyundai in Highland Park, ready to take its place on the scrap heap in return for a new fuel-efficient car and a fat $4,500 government rebate.

Lured by the government's "Cash For Clunkers" program, which is set to launch officially on Friday, the couple are among the first to trade in an aging, gas-guzzling ride through the $1 billion initiative designed to jump-start sagging auto sales.

"It has been 20 years since we had a new car," said Susan Musinski, 57, a customer service manager at the Fox Lake Jewel-Osco. "I'm sorry to see it go, but it needed to be traded in."

Approved last month, 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."

At Rockenbach Chevrolet in Grayslake, owner Gail Rockenbach Vitols is urging customers to "get in right away," figuring an estimated 250,000 sales nationwide will exhaust the rebate funds by Labor Day.

Although she is concerned that many customers may not qualify for the program, she is hopeful that once they hit the showroom, they will buy anyway. "If their old car is worth more than $4,500, they might be happy to trade in that vehicle and buy something new," she said.

Getting a jump on the competition, Hyundai instituted an interim dealer reimbursement program to generate interest before the actual launch. Gregory Hyundai made three advance sales but is planning to do the final paperwork on Friday to secure the government rebate directly.

Paul Hester of Barrington came to the dealer earlier this month to trade in his 1999 Oldsmobile Bravada, which was otherwise valued at about $1,500 and rated at 16 m.p.g. Hester bought a 2009 Hyundai Santa Fe, which gets 20 m.p.g. Listed at $24,000, he drove the new SUV home for $16,800 after discounts and a $3,500 rebate.

"The reason that I came in was the program, there's no question about that," said Hester, 69, a retired engineer. "Everybody was delirious that I was finally getting rid of it."

Rated at just 11 m.p.g., the Musinski's van not only qualified for the program, it could serve as a poster child. Keith Burgess, Gregory Hyundai sales manager, said the van was only worth about $300, "because it starts." Yet the government was willing to pay $4,500 to get it off the road.

"It's a gas guzzler and with the price of gas, it was just eating us alive," said Susan Musinski.

Maintained by her husband, a retired Ford mechanic, the blue and white van proved its mettle over the long haul, even as its metal began to weather away in huge chunks.

Inviting inside, a CB radio still crackled to life by the captain's seat, while blue curtains remained neatly drawn and tied at each window, once portals to the world during family road trips.

With more sentimental value than book value, the deal last week for a 29 m.p.g., 2009 Hyundai Accent was nonetheless compelling. Listed for $14,485, the Musinskis drove it home for $8,259.62 after discounts and the rebate.

"They hit the jackpot on that," Burgess said. "That's what this program was set up to do."

(The Chicago Tribune contributed to this story)

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