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Many American’s who could use a new fuel efficient car and could benefit from the anticipated cash vouchers offered in the Cash for Clunkers bill would not qualify for a new car loan. The bill would reward consumers driving old “clunkers” if they traded their cars in for a more fuel efficient model.

However, many America’s who are struggling with unemployment, layoffs and foreclosures will not be able to qualify for a new car loan.  In fact, there has been an upsurge in used car sales at local car dealers who offer a Buy Here Pay Here model.  In this business model, dealers offer consumers the ability to purchase used cars with a payment plan that takes into consideration poor credit.

Buy Here Pay Here

A “Buy Here Pay Here” dealer group in Ohio called ABC Motor Credit is one automotive retailer that has actually seen an uptick in business.  Sam Snellenberger, an executive at the company commented; “In this economy, consumers need reliable transportation to get to work.  We match them with a car and a payment that they can live with; many have had their cars repossessed.  For many consumers, ABC Motor Credit is their last chance to be able to drive to work or find a new job that requires transportation.”

Consumers with poor credit are hoping that the proposed Cash for Guzzlers or Cash for Clunkers bill provides additional support for consumers hit hard by the recession.  Some opposing voices to the current draft of the cash for Clunkers legislation say that the bill is not doing enough to allow consumers with low credit to utilize a cash vouchers.  Some opponents actually have petitioned that the vouchers should not be made available for wealthy Americans.

With poor credit a reality for many Americans living in 2008, used car sales will continue to rise and consumers with poor credit may be forced to drive less fuel efficient cars because they will be priced in the marketplace at the bottom of the value scale.

Drive Forward America Act

The current status of the Cash for Guzzlers bill is still under scrutiny and compromise with Washington laymakers.  A new effort called Drive Forward America Act is another effort to get a cash voucher system passed this summer.  Senators Debbie Stabenow (D-MI) and Sam Brownback (R-KS) are backing this new measure in a bi-partisan effort.