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Federal Auto Loan

The federal government in the United States generally does not underwrite or make auto loans for American citizens. This means that there is no such thing as a federal auto in the United States.

The well publicized Cash for Clunkers or Car Allowance Rebate System was a onetime federal program that made direct payments to citizens for car purchases. These payments were onetime tax rebates not loans and the CARS program was a onetime emergency measure designed to help the auto industry through the 2009 economic downturn. The Cash for Clunkers program has now been shut down and Congress has announced no plans to revive it.

This means that anybody who claims to be able to get a person a federal auto loan is probably a scam artist. Auto buyers should never deal with brokers or others who claim to be able to get them a federal auto loan.

Federal Auto Loan Scam

The federal auto loan scam is a variation of a popular scam in which an expert claims to be able to get citizens “free money from the federal government.” In these scams the expert claims that there are federal programs which anybody can take advantage of to get federal grants or loans.

Generally these experts are selling a book or other source of information such as a CD or access to a website that will help the buyer get access to the federal money. Usually, there is no federal money, the only person who makes money is the “expert” who often charges several hundred dollars for the information.

In the federal auto loan scam, the con artist claims to be a broker who needs a fee to arrange a federal auto loan. The way this scam ends is predictable, the crook pockets the fee and the victim ends up with no vehicle after spending several hundred dollars for the “fee.”

Never believe any individual or website that claims to be able to arrange a federal auto loan because there is no such thing. Any claim of being able to arrange a federal auto loan is probably a front for some sort of scam.

Credit Union Auto Loans

There are credit unions for federal employees and members of the military that do offer auto loans. These are standard auto loans and have nothing to do with the federal government. The credit unions and not the federal government are issuing the auto loans.

Generally, the auto loans offered by such credit unions are really good deal but they are available only to the credit union members. Federal employees, veterans and service members should check to see if they can join one of these credit unions.

Auto loans from credit unions associated with the federal government are not federal auto loans. Even though many of these credit unions have the word federal in their names they are not part of the federal government. These credit unions; like all credit unions, are private lending institutions that are owned by their members.

Cash for Clunkers

Although Cash for Clunkers has ended the federal government may restart it at some point in the future. If and when Cash for Clunkers is revived or a similar program instituted the media will report it.
Car shoppers should watch the news media for reports about cash for clunkers and similar programs. If the federal government starts issuing federal auto loans that will be reported in the media as well.