What you need to know about Cash for Clunkers Program

What you need to know about Cash for Clunkers Program: Cash for Clunkers is a measure to encourage consumers who own and operate a car that gets under 18 miles a gallon to trade the car in for a more fuel efficient model. If the consumer’s new purchased car is rated at or above 22 miles per gallon, a Cash for Clunkers voucher will be rewarded.

There are two cash vouchers that can be issued when a consumer purchases a new, not used, car from a dealer:

If the new car gets 4 miles per gallon more than their current car, a consumer would get a cash voucher for $3,500.
If the increase is 10 miles per gallon, they could get a $4,500 cash voucher.

But cars that have a trade in value greater than $4,500 would not be used for this program since all cars traded will be sent to the scrapyard.

Cash for Clunkers Program Details: What you need to know about Cash for Clunkers Program

QUESTION: When can I trade in my car for a new one?
ANSWER: It’s not clear yet, but you need to follow the news. Once Obama signs the supplemental war spending bill — it was attached to that— the U.S. Transportation Department has 30 days to put regulations for the program in place. It will almost certainly run through the dealerships, though, so it can’t hurt to start talking to one you’re interested in buying from in the next couple of weeks.

QUESTION:How much can I get?
ANSWER: The legislation calls it a voucher, but it’s more likely to be a credit — of either $3,500 or $4,500 — subtracted from the cost of the car by the dealer.

QUESTION: How do I know whether I’m eligible?
ANSWER: Trade-ins are limited to vehicles in driveable condition; must have been continuously insured by the same owner for at least a year prior to trade in; were manufactured in model year 1984 or later; and have a combined fuel economy rating of 18 m.p.g. or less.

QUESTION: How do I find out the combined fuel economy rating?
ANSWER: Go to www.fueleconomy .gov, click on “Find and Compare Cars” and search for your model. (If there are both old and new combined fuel economy standards for your vehicle use the new one.)

QUESTION: So how do I know how much my voucher is worth?
ANSWER: It depends on the vehicle you’re trading in, the vehicle you’re buying and the difference in the m.p.g. between them.

For passenger cars, the new car has to get at least 22 m.p.g. If the new car gets at least 4 m.p.g. more than the old car, the voucher is $3,500. If the new car gets 10 m.p.g. or more than the old, the voucher is $4,500.
For light trucks and SUVs, the new vehicle has to get at least 18 m.p.g. If it gets at least 2 m.p.g. more than the old one, the voucher is $3,500; if it’s at least 5 m.p.g. more than the old, the voucher is $4,500.
For large, light-duty trucks — including pickups and vans weighing between 6,000 and 8,500 pounds — the new vehicle has to get at least 15 m.p.g. to be eligible. If the new vehicle gets at least 1 m.p.g. more than the trade-in, the voucher is $3,500; if the new vehicle gets at least 2 m.p.g. more than the old, the voucher is $4,500.
For work trucks — defined as a pickup or cargo van weighing 8,500 to 10,000 pounds — consumers can trade in any pre-2002 work truck and receive a voucher for $3,500 for a new work truck in the same or smaller weight class. Consumers also can receive $3,500 for trading in an older work truck and trading down to a smaller, light-duty truck.

QUESTION:Can I buy any new car, regardless of price?
ANSWER: No, it’s limited to vehicles with a manufacturer’s sticker price of $45,000 or less.

QUESTION: Are only new vehicles eligible?
ANSWER: Yes.

QUESTION: I already bought a new car with a trade-in that would have qualified. Am I eligible?
ANSWER: No.

QUESTION: What happens when the money runs out?
ANSWER: Congress predicts this will result in the sale of about 250,000 new vehicles. The funding is good only until Nov. 1 and could run out before that. In that case, the voucher program — unless Congress appropriates more — would end.

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