Scam Busters: Avoid Cash for Clunkers Hucksters


Cash for Clunkers is chugging along, saving car buyers up to $4,500 and more, depending on added dealer incentives.

But the popularity of the program, also known as the Car Allowance Rebate System (CARS), is providing opportunistic scammers with the chance to leave trusting consumers in the dust by stealing their identity.

Both the Better Business Bureau (BBB) and the National Highway Traffic Safety Administration (NHTSA) are reminding consumers to be alert and to protect their personal information, even when a sales person or an online car information site appears to be legitimate.

One online scam promises a certificate that ensures you will get a cash for clunkers deal, provided your send along your full name, date of birth and social security number. (All the information a scammer needs to hijack your identity and your credit.)

"We urge great caution in providing any information over the Internet to any website that purports to be related to this program," the NHTSA states. "The CARS program will not request electronic submission of information from individual consumers."

Here are some additional tips for keeping your clunker dump free of bumps:

  1. Be wary when online. The only official online resources for the CARS program have URLs that end in ".gov" not ".com" or ".org." Other sites may or may not have correct information.
  2. Check on your dealer first. Only work on a clunkers deal with a franchised dealer who is actively participating in the CARS program, the NHTSA has an online dealer locator so you can make sure your salesperson is legit.
  3. Promises of online money transfers are a red flag. Online fund transfers from the government go directly to registered dealers, not consumers, so anyone telling you otherwise is misleading you.
  4. Additional taxes and fees are possible. CARS prohibits dealers from collecting a program-related fee, however, how this credit is taxed will vary state to state. Also, new vehicle fees, such as a documentation fee, may be included in your clunkers sale and you should consult with a participating dealer in your area for details.

If you encounter any CARS related fraud, you can report it to the U.S. Department of Transportation's Office of the Inspector General or the Internet Crime Complaint Center.

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