That's bad news for entrepreneurs like me, who saw an opportunity in the federal CARS (Car Allowance Rebate System) program, which offered up to $4,500 trade-in allowances to buyers who ponied up an old, gasoline-hungry vehicle to buy a new vehicle that gets at least 10 mpg better mileage. For creative entrepreneurs, this was a golden opportunity. I was ready to launch my Clunkers for Cash program and rake in some serious dough.
You see, all that federal money jump-started the value of old cars. I figured I'd buy as many old cars as I could find, vehicles that might be worth, say $800, and sell them to people who wanted to buy new cars and get the federal rebate for, let's say, $1,800. The new owner would drag the clunker to a participating dealer and collect his $4,500 and drive away with a new car and $2,700. I'd be satisfied with my $1,000 finder's fee on each transaction. If I could do five or 10 deals a week, I'd be sitting pretty, and a lot of jalopies would be in a better place.
Unfortunately, the feds have shut down the program before I could get rich quick, but I'm sure somebody made some money in this deal.