"Cash for clunkers" was signed into law only this week, but scammers are already out in force.
The program offers owners of older vehicles up to $4,500 to trade them for a brand-new vehicle.
The National Highway Transportation Safety Administration is warning car shoppers that official-looking sites have sprung up, offering information on the program and asking for personal data or preregistration.
In fact, if the site uses the term "cash for clunkers," it's not official at all. The program's name is Car Allowance Rebate System.
"There's only one official site for the government, and that's NHTSA's CARS.gov Web site," said NHTSA press officer Eric Bolton. "Folks should go there and not rely on ‘cash for clunkers' sites on the Internet as they are not official."
Regulators have 30 days to set up the details and a system for distributing and collecting vouchers, making late July or early August the soonest the incentives could be available.
The bill provides $1 billion for the program through November. An estimated 250,000 vouchers will be issued on a first-come, first-served basis.
The likely scenario for their use: Dealers let you know that your trade qualifies, credit the amount to your down payment, then apply for the voucher. Only new vehicles -- domestic or imported, purchased or leased -- qualify, and they must have sticker prices under $45,000.
Buyers do not have to register or apply for any part of the program. Dealers do.
Trade-ins must be 1984 models or newer, get no better than 18 miles per gallon, and have been registered and insured for the past year.
There's a catch
Car buyers must remember that their trades will be scrapped and have no value to the dealership above the amount of the voucher. A 10-year-old Lexus might qualify for the biggest ($4,500) voucher, but it's almost certainly worth more than that on the open market.
So, Rule No. 1 for buyers intent on using the program: Check and double-check the value of the vehicle you want to ditch. Almost any roadworthy vehicle is worth $1,000 and typically twice that if it's an import.
Which leads to Rule No. 2: The mileage you get in your daily driving does not matter one bit. What matters is what's on record with the government; its source of data is www.fueleconomy.gov. A muffler-dragging 25-year-old Toyota may meet the popular definition of clunker, but if the government's estimates show it got more than 18 mpg combined new, it's not a clunker. You'll see two sets of fuel-economy numbers for most cars: one calculated under an older EPA system, the other recalculated to reflect a new formula. Use the new one.
Rule No. 3: You can layer government programs: Trade an old pickup for a shiny Ford Fusion Hybrid, for example, and you can get $4,500 because the trade is going to the crusher and a $1,700 tax credit (a dollar-for-dollar cut in your taxes, way better than a deduction) for the new hybrid.
Not all hybrids qualify for deductions; Toyota and Honda have sold their quotas under the law, and Ford's expire in the fall. Check out current qualifying vehicles here. Some new "clean diesels" qualify for these credits as well; here's a list.
On top of that, the sales tax on any new car, with a price of up to $49,500, bought between Feb. 17, 2009, and the end of the year is deductible on next year's tax return.
Financial physics still apply
For many people, that means a fairly cheap new car. But they're out there. (Here's MSN Autos' look at new rides under $10,000.) With a $4,500 voucher as a down payment and a four-year loan at 7.5%, the payments on a $10,000 car would be about $133. You can see current loan rates here.
For someone with subprime credit -– a FICO score of 620 or below -– rates could easily top 15%, adding $50 a month to the payments on that $10,000 car.
If your credit is bad, even a car with $4,500 on the hood is a mistake.