President Obama  recently signed into law the Car Allowance Rebate System, also known as Cash for Clunkers. The program is designed to stimulate car purchases from participating dealers and remove gas guzzlers off the roads.

If you have any more questions, the government has created a website to help you. I included some of the frequently asked questions many readers would ask about the program.

Double check to see if your clunker qualifies for the CARS program.

Double check to see if your clunker qualifies for the CARS program.

When Does Car Allowance Rebate System Start?

The Cash For Clunkers program started July 1st and will continue until November 1st 2009, or whenever funds are used up, whichever happens first. Eligible cars can be traded in for a voucher redeemable toward the purchase of a new, more fuel efficient vehicle. Vouchers are worth either $3,500 or $4,500, depending on several factors, including the difference in fuel efficiency between the old and new vehicles.

Would My Car Would Be Eligible?

There are specific requirements for trading in your ‘clunker’. You need to ceck to make sure your car meets the guidelines.

  • Your vehicle must be less than 25 years old on the trade-in date
  • Generally, trade-in vehicles must get 18 or less MPG (some very large pick-up trucks and cargo vans have different requirements)
  • Trade-in vehicles must be registered and insured continuously for the full year preceding the trade-in

How Can I Determine The Fuel Economy Of My Trade In Vehicle?

The CARS Act requires that NHTSA set up the program website by July 24, 2009 to assist consumers to see if their cars are eligible.  Right now, though, you can check out its fuel economy on this site to see your car’s mileage.

The CARS program applies to new car purchases.

The CARS program applies to new car purchases.

Which Vehicles Qualify for the Cash for Clunkers Program?

The Car Allowance Rebate System applies to new vehicles only. So buying a used cars does fall under the program. Some other things to keep in mind:

The new vehicle must have a manufacturer’s suggested retail price of not more than $45,000. That price appears on the window sticker on new vehicles. The new vehicle must also achieve minimum combined fuel economy levels. For passenger automobiles, the new vehicle must have a combined fuel economy value of at least 22 miles per gallon.


Can I use the credit in combination with manufacturer rebates or discounts?

Yes! The CARS program credit can be used in addition to any rebates or discounts offered by the dealership.

Can I combine this credit with other government incentives?

Yes. You can combine this with other State and Federal incentives, like the hybrid vehicle credit.

If you have more questions please check out the government’s website.

Your Thoughts

Will you be taking the advantage of the Cash for Clunkers Program?

Photo Credit: Auto Exposure Canada

Laura Martinez

Laura Martinez