Hold onto your hats (and your wallets). Uncle Sam’s Cash for Clunkers program is roaring down the track. The federal government’s Cash Allowance Rebate System (CARS), has set aside $1,000,000,000 to jump start ailing automotive sales by giving individual consumers $3,500 or $4,500 credits towards the purchase of a new vehicle with a higher fuel economy rating.
The CARS program is set to run until November 30th of this year, or until the funds are exhausted. Congress may or may not renew the program when the allocation runs out.
The Cash for Clunkers rules include eligibility requirements for both the surrendered and new vehicles. Unfortunately, the vast majority of folks will not qualify.
The car, truck, or SUV that’s turned in must meet the following requirements:
- 18 MPG or Less – The vehicle’s combined fuel economy rating must be 18 miles per gallon (MPG) or less.
- Model Year 1984 or Newer – Vehicles older than 1984 are not eligible.
- Continuously Insured and Registered– You must prove that the vehicle has been registered and covered under a liability policy for the past twelve months.
- Driveable – The vehicle must be roadworthy. If it’s not running, it’s not eligible.
The new vehicle must have a cost of $45,000 or less and provide a higher level of fuel efficiency (with the exception of commercial trucks). The value of the credit is based on the amount of the improvement in fuel economy.
|Vehicle Type||Min. Fuel Economy||$3,500||$4,500|
|Passenger Car||22||At least 4 MPG higher||At least 10 MPG higher|
|Light Duty Truck||18||At least 2 MPG higher||At least 5 MPG higher|
|Large Light Duty Truck||15||At least 1 MPG higher||At least 2 MPG higher|
|Commercial Truck||Trade in must be pre-2002|
Many of the car manufacturers have Cash for Clunkers calculators on their websites that provide basic qualification for their models. In addition, both Kelly Blue Book and Edmunds have comprehensive Cash for Clunkers calculators.