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Want Cash for That Clunker? Be Sure It Had Insurance


PHOTO
Cash for Clunkers

SEE ALSO: Cash for Clunlers Consumer Guide

LOS ANGELES July 27, 2009; With government incentives in mind, many motorists may be readying to dump their gas-guzzlers for new cars. But few may know they’ll have to prove it’s been insured for a full year before it qualifies for the “Cash For Clunkers” trade-in.

The Car Allowance Rebate System (CARS) program kicks into high gear this week. The National Highway Traffic Safety Administration’s final CARS rules include insurance requirements.

Anyone participating in the program must provide proof that the car has been continuously insured for at least one year. Proof may include:

  • One or more insurance cards containing the make, model, model year and vehicle identification number of the insured trade-in vehicle;
  • Insurance policy documents showing one year’s previous coverage; or
  • A signed letter on insurance company letterhead identifying the vehicle and the period of continuous coverage.

“Auto insurers will play an important role in helping to remove an estimated 250,000 gas-guzzlers nationwide,” said Candysse Miller, executive director of the Insurance Information Network of California. “Consumers should check with their insurers or agents for help with the required documentation and to make sure that they are getting the right insurance for their new purchase.”

The CARS program stipulates that a car or truck is an eligible trade-in vehicle so long as it:

  • Was manufactured less than 25 years ago;
  • Is in drivable condition;
  • Has a combined city/highway fuel economy of 18 miles per gallon or less; and
  • Has been continuously insured and registered for the full year preceding the trade-in.

The CARS program helps pay for the purchase or lease of a new, more fuel-efficient car or truck via credits of either $3,500 or $4,500. The new vehicle must have a manufacturer’s suggested retail price of $45,000 or less. The program will end on November 1st or earlier if the $1 billion rebate budget has been exhausted.

Consumers interested in saving money on insurance for their new auto purchase can visit 9 Ways to Save Money on Your Auto Insurance Policy.

IINC is a non-profit, non-lobbying insurance communications association. For more information on this and other issues, please visit the IINC Web site at www.iinc.org or follow IINC on Twitter at www.twitter.com/iinc.