If you’re still on the fence about using the  Cash for Clunkers program, you better decide fast.  Transportation Secretary Ray LaHood has announced that the CARS program will end this Monday (August 24 , 2009) at 8PM EDT. The reason given is that the program will be running out of money again and the government doesn’t want to go more than the $3 billion allocated for the program.

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Fear not, though, because Monday has a bright spot: my HP Better Together Giveaway will start then!

I’m one blog in this wonderful and  massive event with 25 blogs, each giving one winner a wonderful bundle, including:

• a brand new HP dv6
• an HP Mini 110
• Syncables software that will connect your computers and share your school projects, academic papers, and personal stuff like photos and videos
• a customized Green Panda Treehouse Timbuk2 bag (each site has it own bag)

If you want to see all the sites and their contest dates, check out the main site over at Back to School: Better Together Giveaway.

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If you want to get tweets on the contest, then please feel free to follow me. I try to get my followers the information as soon as I can, so you can enter all the sites.

President Obama  recently signed into law the Car Allowance Rebate System, also known as Cash for Clunkers. The program is designed to stimulate car purchases from participating dealers and remove gas guzzlers off the roads.

If you have any more questions, the government has created a website to help you. I included some of the frequently asked questions many readers would ask about the program.

Double check to see if your clunker qualifies for the CARS program.

When Does Car Allowance Rebate System Start?

The Cash For Clunkers program started July 1st and will continue until November 1st 2009, or whenever funds are used up, whichever happens first. Eligible cars can be traded in for a voucher redeemable toward the purchase of a new, more fuel efficient vehicle. Vouchers are worth either $3,500 or $4,500, depending on several factors, including the difference in fuel efficiency between the old and new vehicles.

Would My Car Would Be Eligible?

There are specific requirements for trading in your ‘clunker’. You need to ceck to make sure your car meets the guidelines.

• Your vehicle must be less than 25 years old on the trade-in date
• Generally, trade-in vehicles must get 18 or less MPG (some very large pick-up trucks and cargo vans have different requirements)
• Trade-in vehicles must be registered and insured continuously for the full year preceding the trade-in

How Can I Determine The Fuel Economy Of My Trade In Vehicle?

The CARS Act requires that NHTSA set up the program website by July 24, 2009 to assist consumers to see if their cars are eligible.  Right now, though, you can check out its fuel economy on this site to see your car’s mileage.

The CARS program applies to new car purchases.

Which Vehicles Qualify for the Cash for Clunkers Program?

The Car Allowance Rebate System applies to new vehicles only. So buying a used cars does fall under the program. Some other things to keep in mind:

The new vehicle must have a manufacturer’s suggested retail price of not more than $45,000. That price appears on the window sticker on new vehicles. The new vehicle must also achieve minimum combined fuel economy levels. For passenger automobiles, the new vehicle must have a combined fuel economy value of at least 22 miles per gallon.

Source: Cars.gov

Can I use the credit in combination with manufacturer rebates or discounts?

Yes! The CARS program credit can be used in addition to any rebates or discounts offered by the dealership.

Can I combine this credit with other government incentives?

Yes. You can combine this with other State and Federal incentives, like the hybrid vehicle credit.

If you have more questions please check out the government’s website.

Your Thoughts

Will you be taking the advantage of the Cash for Clunkers Program?

Photo Credit: Auto Exposure Canada

As I mentioned in last Friday’s post on automating your finances, we sent our last car payment in. It feels good to accomplish a goal and mark it off our to do list.

Our Financial Goals For 2009

• Debt: We would like to pay off my car loan by March 31, 2009.
• Spending: We’re going to limit eating out for dinner to twice a month.
• Frugal: My husband would like to bring his lunch to work at least three times a week.
• Savings: We want to have 6 months in the joint account in addition to building our house fund.

VW's last car payment has been sent off

Next week when I’ll review February’s progress on our financial goals, we might have another goal in its place, most likely something long term.

Tips On How We Paid Off Our Car Loan

Paying off the car loan didn’t happen by accident, we came up with a plan and followed through.

Developed a realistic budget

Having a joint budget gave us a clear picture of where our money was coming and where went. I think the key for us with budgets is to make it easy to use and easy to change, so we use a Google Spreadsheet. We budgeted a car payment slightly higher than the required payment.

If you’re having some trouble with creating a realistic budget, here are some tips on getting started.

• Track what you spend in two weeks. It’s hard to cut back if you don’t what your weak points are. Having a little notepad or PDA with you and write everything you spend for 2 weeks.
• Withdraw from your bank’s ATM once a week. Take out money you need to eat out, tolls, parking fees, etc. If you run out of money, then make peanut butter and jelly sandwiches or bring leftovers for lunch.  Do not go back until the next week!
• Use you cash, not credit cards. Don’t defeat the previous step by switching over to your credit card. This will help you to stop acquiring new debt, which in turn can drain your savings. National average for standard, variable cards is around 14%, so eliminating new debt will help you.

If you want to see how much a little extra can go when paying off your car loan, try using Money’s debt reduction calculator. Not only are you paying it off quicker, but you’re also reducing the interest paid on the car loan.

Snowflaked extra payments in the car payment schedule

We wanted to pay the car off faster, so we started making extra payments. It didn’t matter how small it was, we went ahead and used our bank’s Bill Pay feature to send in an extra $50 or $100 to the car loan in between payments.

Where can you find some money like an extra $50, $100 or more? Considering looking at some of your expenses to find a deal.

Get others’ opinions on how to tackle it

I’m grateful for this blog’s readers who have been kind enough to share their ideas. We used our economic stimulus check on paying down the car loan based on some feedback from Green Panda Treehouse readers. Thank you for your advice and support! We also followed personal finance tips from other bloggers.

If you want to read how others have reached their debt elimination goals and learned to pay cash for cars, here are some great posts:

• What to Do When You Pay Off the Car
• We Paid Off Our Automobile Loan
• How to Transition from Car Loans to Paying Cash for Cars
• Shaking the New Car Itch: A Tale of Priorities

Another bill bites the dust...

What are we going to do with the car payment money now?

The money will be redirected to our emergency fund in a high-yield savings account. Our ‘car payments’ are going to help build up our cushion during these rough times.

Photo Credits: Rojer and lemonjenny