WATERLOO -- The Car Allowance Rebate System, perhaps more familiar to consumers as "Cash for Clunkers," is now law.

Whether the measure, which became law June 25, steers the automotive industry in an upward direction, remains the subject of some hot debates among pundits.

As far as the Des Moines-based Iowa Automobile Dealers Association goes, there's no denying the merits of the bill.

"It's really just one more tool for both dealers and buyers," said Bruce Anderson general counsel for the IADA. "If it qualifies, the government might be willing to pay a customer more through this voucher system than their car would be worth as a trade."

As Anderson implied, there are catches to this deal.

In essence, when an old vehicle is swapped for a new one that is more fuel efficient, Cash for Clunkers will pay consumers up to $4,500 in credit, depending on how much better mileage the new vehicle gets.

For example, a new car that is 4 miles per gallon better than the old is eligible for a $3,500 voucher. If the new car gets 10 mpg better, it may be worth the maximum $4,500 voucher.

For SUVs, pickups or minivans, a new car that gets 2 mpg better gets a $3,000 voucher, or $4,500 if it logs 5 mpg better. The old vehicle must be less than 25 years old on the trade-in date. The deal applies only to purchases or leases of new vehicles.

There are other restrictions, as well.

The program runs through Nov. 1, or when the funds are exhausted, whichever comes first.

¢ All vehicles traded in as part of the program have to be destroyed. Therefore, the value negotiated with the dealer for the trade-in is not likely to exceed its scrap value. The law requires the dealer to disclose an estimate of the scrap value of the trade-in vehicle.

"Whether you sell your old car privately or trade it in to a dealer, nobody is going to pay what it's worth, but here, there's a possibility the government might," the IADA's Anderson said. "It's a program not only to spur sales but help clean up the air."

How much of a boost it provides, however, is likely limited, he added.

In a new-car market that has topped 10 million in annual sales in recent years, the goal of Cash for Clunkers program is around 250,000 vehicles, according to numerous published estimates.

"People are asking me about it already," said Bill Colwell, owner of Bill Colwell Ford Inc. in Hudson. "They know the government is going to be putting out that incentive."

Colwell hesitated to predict whether Cash for Clunkers would provide his dealership with much of a sales bump.

"I hope it's big," he said. "I'm sure all dealers welcome the opportunity."

Mark Birdnow operates four dealerships in the region but also has a salvage yard. He said he also was waiting on the final rules before passing judgment on the benefits of the program. But, he said any codicil that required the entire traded vehicle to be destroyed would be counterproductive.

"The original bill said something about any (clunkers) had to be sold to a scrap year and the engine, transmission and driveline could not be resold," Birdnow said. "If that's in the final rules, I don't know the words to describe it."

Birdnow said such a requirement likely could harm consumers who simply couldn't afford to buy new.

"A fair percentage of those who drive older cars like that might not be able to afford a new car," he said. "On the other side, there are people who cannot afford to trade whatsoever and want to fix their old vehicle because they have to. By requiring good parts get destroyed, all that's going to do is drive up the costs and make it more difficult for those folks to keep those things running."

Anderson admits the new law may have its flaws, but adds that it does serve a legitimate purpose.

"We're hoping it will be an incentive who really does have that old vehicle that's high emitting, low value," he said. "There's all this talk of increase in (government-mandated mileage standards), and that's a good thing. But, you don't get the benefit of those clean cars until you buy them."